Home Entrepreneurs Get an SBA loan for your business

Get an SBA loan for your business

Get SBA loan
Get SBA loan

When starting your own business, you will face the following question: where am I going to get the money I need? In Hispanic Entrepreneurs we help you answer it by guiding you, read this article and get an SBA loan for your business.

Where to get a loan to start a business?

In general, entrepreneurs use their savings or borrow from friends and family, ignoring that there are other alternatives to inject capital into a company.

In Tennessee, small entrepreneurs have the advantage of having different financing programs that are promoted by the Federal Agency for the Development of Small Business (SBA). It offers advice related to government small business loans. And even the opportunity to apply for federal contracts.

But it is not in vain that the Tennessee government makes efforts to support the venture. Small businesses have a significant impact on the economy of this state. In fact, they represent 97% of all jobs and use at least 44,9% of the private sector workforce. The SBA programs are then the open door for your growth.

These financing plans vary in terms of the amount to be granted, the purpose of the loan and the requirements or documents required by each lender. The three key points of the programs are:

  • The type of business applying for the loan.
  • Lender type.
  • The local SBA office where you are applying for financial aid.

It is important to clarify that the office itself does not grant the loan, but rather reaches out to small businesses to help them obtain a loan with third parties. Likewise, it approves or endorses the lenders and establishes the criteria for granting the loans; so that the lenders can be guaranteed the return of their money.

The lender can be a bank or community lending organization. The latter is an association made up of friends, relatives, members of a community or co-workers who come together to mobilize funds for a common purpose.

How to find a lender through the SBA?

To get an SBA loan for your business you have to find a lender endorsed or certified by the federal agency. You can turn to Lender Match system, where you will find which are the lenders for your type of business and contact them to request a loan.

If you want to contact a lender, what you should do is fill out the contact form that you will find on the SBA website. There you will describe your company and what its needs are. Then you just have to wait for the information from the lenders to reach your email. According to the agency this will take two days.

In the mail will be the lenders who were interested in your business. The next step would be to contact them to find out more details about financial aid. They will also want to know more about your business, so you have to be prepared to answer their questions.

Once you have all the information about the loans, compare and choose where you are going to request it. Send the documentation and we just have to wait for the answer.

We recommend avoiding these mistakes when applying for a loan for your company.

Prepare to interview with the lenders

One of the great fears of business owners is rejection by lenders. And many times this happens due to lack of preparation and because they do not know how to face them during the interview.

To expand your options for accessing an SBA loan for your business, you must be ready and know the business well to offer all the information they ask for.

The first thing is to have a business plan, because most lenders will ask you for one.

Be prepared to answer some basic questions like how much money you need and how you will use the funds; what is the financial projection of the company, and your experience in the industry. Likewise, they may ask you for your credit history and some guarantee for the loan.

Turn to your network of support and advice to help you prepare for the interview.

small business loans

One of the most common SBA plans is the 7 (a) Loan Program. The funds can be used to create a new business or assist in the acquisition or expansion of an existing one.

The Microloan Program is another of the SBA programs. It awards up to $ 50.000 and is intended for small non-profit businesses and child care centers.

The microloan can be used to purchase machinery or equipment, furniture or accessories, working capital or inventory and supplies. It is a way to help small entrepreneurs to grow.

Another option is the CDC / 504 Real Estate and Equipment Loan plan. It is intended for the purchase of fixed assets such as machinery for long-term use, acquisition of land, modernization or remodeling of the company's facilities.

It can also be used for utility, parking or street improvements. The loan amount may vary depending on the purpose of the application.

SBA disaster loans is a program that provides a low-interest, long-term loan to homeowners, renters, and businesses of private non-profit organizations. Its purpose is to contribute to the repairs of damages caused by a declared disaster of machinery and equipment, real estate and other assets of the company.

Through the SBA you can also access the Payment Protection Program, which is one of the Government's grants for small businesses as a result of covid-19.

How do I get a government loan for my business?

Requirements to apply for small business loans

Lender requirements may vary, but you generally must submit the following documentation:

We lend for business

  • A business plan.
  • The amount required and what you will use it for.
  • A credit history.
  • Financial projections showing how you will use the funds and how you will repay the loan.
  • An asset that can serve as a guarantee to lenders.
  • Industry experience. Although it is not a mandatory requirement, the fact of showing that you know the industry where your business operates will be a point in favor when applying for a loan.

These are not the only programs, there are also grants and financial aid. All resources are available on the official SBA website. Visit it to start your SBA loan application for your business.

With information of: https://www.sba.gov/programas-de-financiamiento/prestmasters

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