Tips on Getting started with Your Business
For many aspiring entrepreneurs, setting a business is the most difficult part because of insufficient capital. Others may have experienced rejection from banks and commercial lenders when they tried to obtain a business loan financing. If this happened to you, don’t feel helpless. Even if your loan application has been declined, you can still fulfill your dreams of owning a business. How?
Loans from the U.S. Small Business Association (SBA)
The government offers assistance especially for small business enterprisers who were not able to get the business loan they need. If you’ve been turned down by a lender, you can turn to the Small Business Association (SBA) for help.
Take note that the SBA does not directly provide financing assistance to small businesses. Instead, the SBA will help you find a commercial lender who is willing to give you the financing assistance you need. SBA loans are categorized into three loan programs - the basic loan program, the 504 loan program and the micro loan.
Most new business owners apply for the basic loan program. If you have already established your small business and are in need of additional financing for your expansion projects, you can apply for the 504 loan. Microloans are also available for smaller business financing needs. Compared to the basic loan and the 504 loan, microloans are smaller with the maximum of $35,000.
Applying for an SBA Loan
If you’re going to apply for an SBA loan, you should be patient and willing to wait. Since the SBA caters to a lot of new business applicants, the application process can take months to complete. The waiting time starts from the moment you submit your loan application. However, the turn-around time starts when you meet with a lender to discuss your loan proposal. If you need a fast loan financing option, you may start your search for an angel investor or a business capitalist instead.
Even with SBA loans, your credit history plays an important role. Be sure to check your credit report at least 6 months before applying for a business loan. This should give you enough time to work on improving your credit rating if it needs to be improved. Remember, being able to raise your score by even a few points can make a big difference in getting an approval of your loan application. A higher score also means lower interest rates and better repayment terms.
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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