Where to get an SBA loan?
The SBA helps small businesses get loans by at least partially guaranteeing them from various lenders, but this begs the questions – where to get an SBA loan. As the agency doesn’t lend money directly to small business owners, it sets proper guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions. The agency helps reduce risks for lenders which also helps them make it easier to access capital. If you’re a small business owner who wishes to know where to get an SBA loan, read on for more information:
The first thing you have to do is available research lenders. It’s good to know that more lenders are willing to cater borrowers more than ever. You can look them up online. The following can answer your quest on where to get an SBA loan:
Direct Online Lenders
Lots of online lenders are willing to cater to small businesses. Borrowers only need to go through a relatively easy online process. Various trusted companies can provide fast small business working capital loans, cash advances, and short-term loans. The funding can range from $5,000 to $500,000. Some websites also offer access to multiple lenders as they act as a lead generation service for lenders.
Large Commercial Banks
Banks such as Wells Fargo, JP Morgan, and Citibank are some of the traditional lenders to small businesses. Note that these sources of funds tend to be slower than their counterparts. They also have more rigorous underwriting criteria.
Local Community Banks
Lots of community banks also have a strong desire to offer small business loans to local businesses. Look into your local banks and see which ones are possible to get an SBA loan.
Peer-To-Peer Lending Websites
Sites that act as middlemen between institutional and individual lenders and small borrowers are also there. You can look up Prosper, LendingClub, and FundingCircle. They are some of the lenders that are known to make decisions quickly.
How the lender will view your credit and risk profile
Lenders judge a small business loan depending on the borrower’s credit profile. Make sure to review them carefully and consider taking proper actions to remedy any unattractive aspects of your credit history.
Outstanding loans and cash flow. Aside from your credit history, lenders also need to review your outstanding loans and debts. They need to determine that your cash flow will be sufficient to pay existing loans and other obligations. Lenders will also need to make sure if you qualify for the loan you want to apply for.
Assets in the business. Lenders also need to review the assets in the business. The current assets like cash and accounts receivable are very crucial. They need to see if there is an excellent base of assets to go after in case of a loan default.
Time in business. Lenders will also tend to consider companies that have been operating for several years.
Investors in the company. Viewing the company’s professional venture capital investors, strategic investors, or prominent angel investors will also be taken into consideration.
The SBA loan rates are what many small business owners can take advantage of but the key is to know where to get an SBA loan. If you’re thinking about where to get an SBA loan, the list above is the general entities you can tap. Before you try to comply the SBA loan requirements, make sure you’re eligible for one. Find out if you are by reading our articles related about this matter.