If you are thinking of starting your own business or looking to expand an already existing one, then a small business administration loan could be just what you need. In 1964 the SBA expanded its portfolio to join the War on Poverty, with the Equal Opportunity Loan Program (EOL). The SBA can guarantee as much as eighty-five percent of loans up to $150,000 and seventy-five percent on loans of more than $150,000. Instead, it has created a network of banks and lenders in your local community that offer SBA loans.
The SBA loan applications are made through a bank. The SBA 7(a) is the most common loan program. The 504-loan program provides long-term loans for fixed assets while the 7 (m) loan program called ‘micro loan’ provides short-term loans worth up to $35,000. In addition to helping financially distressed homeowners, the government is also providing housing assistance to low income families, veterans, homeless people, seniors, and people with disabilities.
The goodwill of the firm of the seller, may be viewed as a sign of financial crisis or weakness by customers and other creditors, due to this process. Since the certified bank does much of the SBA’s work, the agency offers turnaround times of three business days for processing the application.
2. Result in a seemingly endless 8a application review process at the SBA and cost your business concern the ability to bid on and win federal set-aside 8a contracts. It provides loans with low down payments after a careful scrutiny of an applicant’s financial status.
Small businesses looking for working capital can approach these lenders, and they usually get approval if they have a formidable business plan. If the money is for an already established business, the borrower would need to present detailed financial statements indicating the profitability and the cash flow situation of the business.