If you are an entrepreneur who wants to start a business or grow an existing one, you will most likely face the challenge of finding a sufficient amount of cash to fund the needed capital and other expenses. You can apply for a normal business loan with a bank, but the chances of you getting approval are low because small businesses are generally considered as high-risk enterprises, which banks normally avoid.
Applying for an SBA loan in Ogden is a good alternative. Learn why.
SBA Loan in Ogden
Fortunately, you do have a viable option. As part of the Government’s drive to encourage the establishment and growth of small businesses, the US Small Business Administration (SBA) has put in place the SBA loan program, which is essentially the same business loan that you apply for with banks and other lending institutions.
Because the risk of the lender is mitigated or lessened with the SBA guarantee, the chances of your loan getting approved is greater than if you applied for a “regular” business loan. The requirements are similar; although you would need to prove to the SBA that your business is qualified for the program, based on the criteria it has set, which varies from one industry to another.
Types of SBA Loans
The two popular types of SBA loans are:
1. 7(a). Under this program, which is mostly used to fund startups or expanding businesses, the SBA guarantees up to 80% of the loan, with a maximum loan amount of $750,000.
2. 504. This is a three-party SBA loan for fixed-rate long-term real estate (related to the business) and capital equipment investments for businesses that commit to job creation (or retention) and identified goals of public policy. Qualified businesses can get up to $5M (or up $5.5M for certain industries).
The growth of small businesses is essential to the sustainable economic progress of any city, state, or country. The SBA loan program helps promote this growth without burdening the lending institutions with 100% of the risk that characterize small businesses during startup or expansion. Look for a trusted lender to maximize the benefits of this financing option.