Finance Your Start-Up – Get a SBA Loan to Do It

Of all the financing options available to you when starting your first business, the SBA (Small Business Administration) 7(a) loan program is one of the best. The SBA 7(a) loan program focuses on providing small business owners with assistance when they are seeking bank financing.Bank financing is one of the best forms of start-up financing available if you can get it. I highly recommend checking out the 7(a) loan program when looking for money to start your business for 2 reasons:
It’s cheaper than almost all other options
It’s one of the least restrictive forms of financing as the bank won’t tell you how to run your business.The 7(a) loan program works like this:
You head into your bank to apply for a loan to start your business.
You ask for or your banker recommends a SBA 7(a) loan.
You complete a 7(a) application and provide a Business Plan.
The bank underwrites your application and Business Plan to determine if you’re eligible for start-up financing under SBA guidelines.
If you’re approved then you’re bank gets a guarantee on the loan from the SBA. The SBA will guarantee up to 85% of a loan $150,000 or less.
To obtain the guarantee the bank has to adhere to SBA guidelines, so loan terms are longer, interest rates are lower than they otherwise would be, and it’s OK if you’ve never been in business before.
End Result: You’re happy because you get a loan to start your business and the bank’s happy because 85% of the loan amount is guaranteed, which greatly reduces the bank’s risk.There are a few additional things you want to keep in mind:
This type of financing has the highest approval rate when used for start-up businesses who need $150,000 or less (If you’re planning on buying a business you can go up to $250,000 and maintain a high approval rate).
You will need a strong business plan, income/expense projections, business experience, cash, and good credit to get approved.
Plan on 4-7 weeks from the time you start the application to the time you receive loan funds.
If you have credit scores less than 600 or a bankruptcy within the last 7 years you’ll need to find another way to finance your business.In short, the SBA 7(a) loan program is ideal for the first time business owner looking to borrow money to start a small business. If this is what you’re looking to do you can find out more information at http://7asecret.com.