SBA loans have the backup of the US and this makes them attractive to the owners of small businesses. You can apply for different loan sizes and still benefit from a favorable and long repayment plan. The best part is that you would enjoy incredibly low interest rates. If you would wish to apply for SBA loans CA has a decent number of accredited banks you could approach.
Based on the amount of cash you are interested in borrowing and even the repayment period that you find most suitable, you could get financing at 7% APR. This is quite low compared to private lenders who can charge as much as 80% annual percentage rate. Unfortunately, a decent number of applications are turned down because of one reason or another.
For you to qualify for SBA financing, you need to have reasonable industry experience. Your business should therefore need to have been in operation for a good number of years. If you are a startup, your application is likely to get turned down and it will be better for you to simply focus on lenders who offer to finance startup businesses.
Another common cause of applications getting turned down is when one has a low credit score. There are lenders who hardly consider your credit score or merely require you to have a decent credit score. Approaching such lenders would leave you with better chances of getting financing. For one to get the minimum SBA loan, he or she must have a credit score of between 620 and 640. For larger loans, the credit score must be 660 and above.
Another eligibility criterion you must pass is that you ought to have substantial collateral. The harsh economic climate has made it imperative for banks to work on protecting their investments. If you can provide collateral, then the lender will be promised of getting back the investment in case you fail to service your loan.
The US will back up your loan up to 75 percent. That said, the bank will insist on getting over 25 percent of security. This is because any collateral collected still has to be split between the bank and the SBA. This makes it crucial for borrowers to be in a position to collateralize a large part of their loan amounts.
Getting a loan approved may not be possible if you are not willing to provide a personal guarantee. Doing this would assure the lender that you are ready to be held personally responsible for your loan even in the event where your business does not flourish. If you do not want your personal affairs to mix with your business monies, you may want to search for a lender who does not demand a personal guarantee.
Another unfortunate fact is that SBA loans are not for persons in excluded industries. It is necessary for your business to be within an industry that is considered eligible for financing. To go around this obstacle, you only have the option of working with other suitable lenders who have not set strict industry exclusions.
Based on the amount of cash you are interested in borrowing and even the repayment period that you find most suitable, you could get financing at 7% APR. This is quite low compared to private lenders who can charge as much as 80% annual percentage rate. Unfortunately, a decent number of applications are turned down because of one reason or another.
For you to qualify for SBA financing, you need to have reasonable industry experience. Your business should therefore need to have been in operation for a good number of years. If you are a startup, your application is likely to get turned down and it will be better for you to simply focus on lenders who offer to finance startup businesses.
Another common cause of applications getting turned down is when one has a low credit score. There are lenders who hardly consider your credit score or merely require you to have a decent credit score. Approaching such lenders would leave you with better chances of getting financing. For one to get the minimum SBA loan, he or she must have a credit score of between 620 and 640. For larger loans, the credit score must be 660 and above.
Another eligibility criterion you must pass is that you ought to have substantial collateral. The harsh economic climate has made it imperative for banks to work on protecting their investments. If you can provide collateral, then the lender will be promised of getting back the investment in case you fail to service your loan.
The US will back up your loan up to 75 percent. That said, the bank will insist on getting over 25 percent of security. This is because any collateral collected still has to be split between the bank and the SBA. This makes it crucial for borrowers to be in a position to collateralize a large part of their loan amounts.
Getting a loan approved may not be possible if you are not willing to provide a personal guarantee. Doing this would assure the lender that you are ready to be held personally responsible for your loan even in the event where your business does not flourish. If you do not want your personal affairs to mix with your business monies, you may want to search for a lender who does not demand a personal guarantee.
Another unfortunate fact is that SBA loans are not for persons in excluded industries. It is necessary for your business to be within an industry that is considered eligible for financing. To go around this obstacle, you only have the option of working with other suitable lenders who have not set strict industry exclusions.
About the Author:
You can find a summary of the benefits you get when you take out SBA loans CA companies offer at http://www.cornerstonecapitalfinancegroup.com right now.
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