This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel
This post will answer your questions and doubts about SBA loans.
The U.S Small Business Administration is an autonomous small business federal loan agency established in 1993 to stimulate the economy. They assist small businesses and/or projects in the form of traditional debt financing. It offer a diverse set of personalized and specialized lending programs, counseling services, support networks, and business consultations to ensure loan approvals.
The program is dedicated to the integral role that small businesses play in the economy. In liaison with the lenders/banks, the SBA program remains committed to the required amount of capital and counseling services to launch, grow or expand a small business.
Once approved, the SBA guarantees 50%-90% of the loan in the event the loan defaults, ultimately standing true to their diligent business evaluations process and undeniable support in helping small businesses breakthrough into the US market. This ensures additional security and mitigates the potential and expected risks involved for its lender’s investment.
Instead of using conventional bank financing, this program serves as the middleman in the process and as an effective tool to ensure all parties are qualified, invested, and financially profitable over time. Each deal the SBA is different and facilitates each small business and owner’s needs as they best see fit.
The SBA loan is a great financing option that usually favorably aligns with the personal and professional goals of new and small business owners since its inception.
Lending is done through banks and other financial institutions SBA provides feedback, advice, and support SBA guarantees a portion of the loan and promotes the small business.
Preferred Lending Partners status banks generally have a high success loan success rate Non-Preferred Lenders don’t have the authority for approval and make the process longer.
For example, this is essential, in case you cannot return it.
Good credit scores and history is important but merely a part of the application process.
Other factors may include costs/expenses, historical revenue growths, management experience, industry trends, COVID-19 impacts.
As well as, business model sustainability, cash flow, and working capital. Financial strength and liquidity, debt, closing costs, 2020 SBA guidelines.
Owner/entrepreneurs reputation, history, personal and professional experiences, level of education, and industry expertise are pivotal.
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Make sure to give us a call and book your first consultation appointment with one of our outstandingly experienced franchise and business consultants.
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