By Carol Tice
Is your small business looking for a loan? If so, the Small Business Administration (SBA) is one of the best resources at your disposal. The SBA works with small businesses to secure loans in favorable terms.
SBA lenders are able to offer better loan terms because the U.S. government guarantees the principal. Some of the benefits of an SBA loan include:
SBA lenders are able to offer these attractive terms because the loans are guaranteed by the Federal Government. SBA loan monies can be applied to inventory purchases, overhead, debt refinancing, marketing expenses, and any other operational component of running a business
The best way to begin your search for SBA lenders is to visit the Small Business Administration's official website where there is a plethora of information.
On the SBA website, there is a list of SBA lenders and recent rankings for 7(a) lenders. 7(a) lenders are financial institutions that participate in the SBA-lending program. The SBA website provides information on these lenders such as how many loans individual banks made that month, and the dollar value of those loans.
There's also a local resource page where you can find the preferred lenders list. Preferred lenders are optimal for small businesses who need to expedite the loan process. Whereas some SBA-participating lenders must seek approval, preferred lenders do not, so the loan process is faster.
From the perspective of a small business owner seeking a loan, preferred lenders are great potential partners because they have essentially earned the SBA's seal of approval.
There are several other places to get information on SBA lenders. The National Association of Government Guaranteed Lenders serves the needs of small businesses and offers training for SBA lending professionals. Visit the NAGGL's website to find information that can help small businesses get SBA loans.
Some of the best features within the NAGGL website are reports on SBA lending. A report on the most active national lenders in the 7(a) program can help small businesses find SBA loan partners.
The SBA and NAGGL websites are just two of many others that can provide information on the SBA loan process. An SBA counselor can provide you with resources to aid in finding information about lenders and what it takes to get an SBA loan.
Qualify For An SBA Loan
Preparation is the key to qualifying for any type of loan. Small businesses can take several steps to increase the chance of being approved for an SBA loan. Cleaning up your credit score and retaining all financial documentation reflecting business performance are important parts of this process.
More importantly, small business owners should have a clear business plan that can be presented to a potential lender. The plan should detail the loan amount being requested, how the funds will be used, and how the loan will be repaid.
Preparing to request a loan takes time. An SBA lender will look favorably upon a business owner that has everything in order. Make use of the services provided by small business support associations so that your company can stay competitive in an increasingly competitive global business community.