Consider an SBA 7(a) loan for small business financing.
Loans from the Small Business Administration are one of the most common forms of small business financing. Created to encourage banks to lend to small businesses, SBA 7(a) loans offer preferable repayment terms and multiple loan options, making them ideal for entrepreneurs at all stages, from start-up to expansion.
Why an SBA 7(a) Loan?
SBA loans offer up to $5 million in small business financing that can be used for almost any business purpose, including start-up, acquisition or expansion. Loan proceeds can be used as working capital, revolving funds, or to purchase real estate, equipment, inventory, etc.
Preferred by lenders and small business owners alike, SBA loans promise low interest rates, longer repayment terms and no ballooning costs, making monthly payments manageable for small business or franchise owners. On top of this, SBA 7(a) loans can be combined with other forms of small business financing to help you reach your funding needs. In fact, you could even use money from your retirement account to cover the down payment for an SBA loan with a Rollover for Business Start-up arrangement.
The five “Cs” are important when assessing eligibility for an SBA loan. Generally, banks will look at a borrower’s:
- Cash: 20 percent equity injection for an existing business; 30 percent for a start-up.
- Credit: 640+ credit score.
- Capacity: Secondary income is preferred to minimize the risk of default.
- Character: Three years of applicable work experienced is preferred.
- Collateral: Personal collateral is required for a traditional SBA loan.
The Guidant Touch
Guidant Financial makes it easier to obtain an SBA 7(a) loan for qualified borrowers through a streamlined process that gives immediate access to thousands of lenders. Not only will we help you find the lender that’s right for you, but we provide comprehensive document analysis to ensure you have everything in line for approval.