A small business venture can be one of the most rewarding things you do in life, but it can also be extraordinarily challenging. It’s easy to get caught up in the daily grind and lose sight of future growth and expansion. Fortunately, Small Business Administration (SBA) loans can help.
These specialized loans allow many small business owners to borrow when they otherwise wouldn’t qualify for a traditional loan. And with longer terms and smaller down payments, they’re more feasible, too.
Interested in an SBA loan? Here are five things you need to know:
1) Visit your bank. – SBA loans do not come directly from the SBA; instead, they partner with banks to provide loan guarantees and repayments. If you’re interested in applying for an SBA loan, visit your local bank.
2) Types of loans. – SBA loans come in four varieties: 7(a), microloan, real estate and equipment and disaster loans. The most common is 7(a), which requires a business owner to use available assets before requesting assistance, prove that the loan will be used for reasonable business purposes and have invested equity.
Another common type is real estate and equipment, which offers aid to businesses seeking to upgrade expensive equipment or expand their facility.
3) Not for a crisis. – If your business is struggling to survive, an SBA loan is probably not for you. These loans are designed for businesses that need a boost and not a complete restructure. If your company is in distress, see a local banker about your options.
4) Start with a plan. – Before applying for an SBA loan, it’s critical to have a solid business plan detailing future goals and how you plan to reach them. Without a roadmap for where you’re going, you won’t have the structure necessary to obtain an SBA loan.
5) Get to know your banker. – SBA loans can be confusing, so it’s important to develop a relationship with a local banker you trust. As they get to know you and your business, they’ll be able to not only guide you toward the right loan program, but also help you reach future goals.
Start Reaching Your Goals
If you are planning to start a business or expand an existing business, Countybank is here as your full-service, integrated financial services provider. Call us at 864-335-2440 and tell us your story.
Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.