Many business owners have heard of Small Business Association loans or SBA loans but may not know what’s required to acquire one. Although SBA loans are converted, they’re not the easiest to get and the application and approval process can be quite lengthy. These loans aren’t the easiest to acquire. However, businesses benefit by gaining access to funding guaranteed by a federal agency which usually means low-interest rates and longer terms. However, there are several different types of SBA loans designed to cater to the different needs of businesses.
What is an SBA Loan?
Before this question can be addressed, business owners should understand that the SBA isn’t a lender. They work with lenders and act as guarantors for a large portion of a loan acquired through an actual lender or financial organization. The SBA can guarantee up to eighty percent or more of a loan issued to a small business. This absorbs some of the risks placed on the lender and helps them to recoup some of the money if a business owner defaults on a loan.
As mentioned above, there are several different SBA loans designed to meet a variety of different situations. From microloans designed to meet smaller funding issues and dilemmas to disaster loans that are meant to help businesses recoup, these loans are designed with the needs of different businesses in mind. The interest rates are competitive and must meet certain maximum interest requirements which are determined by the prime rate and a set markup rate.
-SBA 7(a) Loan
-SBA Express 7(a) Loan
-CDC 504 Loan
-Community Advantage SBA Loan
The applications process for an SBA loan is lengthy in that it requires many documents. Loan applicants will need to gather all the pertinent documents and submit them along with their loan applications. SBA loan applicants will need a:
-Business debt schedule
-Personal financial statement
-Current income statement and balance sheet.
-(New businesses) Cash flow projections for one year
-Copies of lease agreements.
-Real estate appraisals
-Personal and business tax returns (three years)
-Personal and business bank statements (One year)
Acquiring an SBA loan can be quite beneficial to many businesses. The time and attention required to meet the application process can be well worth it based on the relatively low interest rates and longer loan terms. Contact Progressive Capital Funding today, our courteous and highly trained staff are waiting for your call.