6 Benefits of SBA Loans
When you are a small business looking for funding, the process can be a little difficult. The Small Business Administration, or the SBA, can help. While they do not give out loans themselves, they can assist you in finding the right lender for your company and getting approved. The following are several benefits you can enjoy when using SBA loans.
1. You Can Have Access to Helpful Resources
If you’re just starting out, there might be a few areas in which you aren’t very confident yet, and the SBA can help here too. Along with loans, they also offer certain resources, such as courses, seminars and other events, that can help your business grow.
2. You Can Apply for Higher Loan Amounts
If you need a lot of funding, a traditional loan may not be the best way to get it. Many banks may be reluctant to loan large amounts of money to a small business because it is seen as a higher risk. With the SBA on your side, you have access to higher loan amounts.
3. You Can Make Smaller Down Payments
Sometimes the type of financing you need, such as a loan for real estate or equipment, might require you to make a down payment. If this is the case, using a loan through the SBA can result in smaller upfront payments.
4. You Can Pay Lower Interest Rates
Especially if you have a shorter credit history or a lower credit score, interest rates from a traditional loan can be high. When you get a loan through the SBA, the rates that can be charged are limited. This means you can pay less than you would have otherwise.
5. You Can Use Your Money How You Need To
Certain types of loans may require you to use the money in a particular way. This might not be a problem if you are looking to finance just one area of your business, but otherwise, it’s useful to have some flexibility. Some SBA loans allow you to use the money for almost any business purpose.
6. You Can Receive More Favorable Terms
When you apply for a loan, sometimes the terms aren’t as favorable as you would like. Some lenders would like to have the money paid back more quickly than your business might be able to. With the SBA, you can often receive a longer repayment period that will help keep monthly payments lower.
If you are having trouble qualifying for a traditional loan, SBA loans are a great alternative. They offer a variety of loan types, so be sure to look over your options to determine which is best for you.
