The Role of SBA Loans and how to Qualify
Surveys made by federal government research groups reveal that about 75% of jobs in the US are provided by small business owners. Yes, small business entrepreneurs play a big role in keeping the US economy alive and flourishing. It is only right that the government provide the much needed financial assistance to existing small enterprises as well as for aspiring entrepreneurs who want to start their own small business.
The Role of the SBA
The SBA (Small Business Administration) has been providing financial aid for smaller enterprises in the US since 1953. Serving primarily to small business entrepreneurs, this government organization helps business owners get the financing assistance they need from banks and private lenders.
Getting help from the SBA ensures that you’ll get the business loan you need. If you have been declined for a business loan, you can turn to the SBA for support. There are basically three business loans that the SBA offers:
- Basic7 Loan Guarantee. This type of loan is provided by an SBA accredited commercial lender and offers a maximum amount up to $2 million financial support.
- 504 Loan Program. This loan is directed by the CDC (Certified Development Company) and is provided for entrepreneurs who want to help the community by running a small businesses.
- MicroLoan. Both start-up and growing small businesses can apply for this SBA loan. The maximum loan amount offered is $35,000 which is sufficient for purchasing equipment, supplies, stocks, or inventory. However, the money cannot be used for debt repayment.
Requirements of SBA Loans
To get approved for an SBA loan, the applicant must have previously submitted a business loan application a lender but was rejected. If you failed to get a business loan for any reason, you can seek help from the SBA.
Submit your SBA application complete with all the necessary information about your business or proposed business. If you’re an existing business, you’ll be required to declare your sales revenue, financial details, number of employees, etc. You will also need to submit your business permit, balance sheets, account statements, tax returns for the past three years.
What is considered as a small business? If you have employees that do not exceed 500 in number, you are considered to be small businesses. Furthermore, you need to have an average sales income not exceeding $6-$12 million per year to qualify. If you make more that $12 million annually, you are not considered to be a small business.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2008.
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