After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
Taking out an SBA loan can be the financial step that takes your small business from struggling to successful. If you need capital in order to grow and expand your business, an SBA loan is a great option because SBA loans tend to have lower interest than other types of business loans. An SBA loan is a loan that is secured by the Small Business Administration, reducing risk for both lenders and borrowers. Here are a few tips to follow when deciding to take out your first SBA loan:
Start the Process Early
One of the downsides to an SBA loan is that they tend to involve more paperwork and a lengthier application process than other types of loans, since the lender is required to follow the guidelines and processes set in place by the government.
SBA loans tend to be worth the extra time since the terms are so favorable for borrowers, but it is important to start as early as possible instead of procrastinating. If you need immediate access to working capital, you may want to talk to your lender about other small business loan options.
Create a Business Plan
One of the factors a bank takes into consideration when processing your SBA loan application is the viability of your business plan. Ideally, you will have a clear and persuasive business plan in writing that includes projected income for the first few years after you receive your loan. You should also specify which aspects of your business you will be investing the SBA loan funds into.
The SBA's website actually has a handy web tool for creating a detailed business plan yourself, following a series of prompts. Alternatively, you may choose to hire a small business coach to help you put together and document a viable, specific, and realistic business plan.
Prepare for Your Loan Interview
In order to receive an SBA loan, you will most likely have to complete a lengthy interview with a lender. In addition to bringing copies of your business plan, you will need to bring the rest of your business and financial documentation, including bank statements and tax returns. It is a good idea to prepare for this interview the same way you would for an important job interview. Dress professionally, arrive early, and remain calm and polite throughout the process.
Following these tips and working with a trusted lender who offers SBA loans will ensure you get through the loan application process smoothly.
Share13 February 2018
