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Recent changes in the (SBA) 7(a) loan program means many businessez might now have more opportunities to obtain The new program enhancements could help busines owners continue to manage and grow their companiesd and get their financial dreams backon track. SBA is a federalk program dedicated to helping small businesses with loands made available through locallending institutions. Recently, the SBA announcesd it is: These changes provide an economic incentive for small businesses to obtainha loan, and they allosw SBA lenders to offer an immediate cost savings to For example, a customer approved for a $238,000o 7(a) loan could save up to $5,400 in The new provisions add to the alreadyt substantial benefits small businesses often can realize when they choosew an SBA 7(a) loan to buy real estate, acquiree a new business or franchise, purchasre equipment or increase working capital.
Those benefitz include: As with any the interest rate and monthly payment for an SBA loan will depending onthe transaction. Also, the amount of cash you’lpl need at closing will vary, depending on the type of loan you Expenses such as closing fees and appraisalss often can be included in the SBA financingpackagwe – a feature that appeals to many business owners. Many SBA loanes are made to acquire owner-occupied commerciall real estate. Down-payments for these loans can be as low as 10percenyt – much lower than for othe types of financing, so less cash is require for closing.
These loans providde other benefits overconventional loans, including: • Terms of up to 25 yeares for real estate, with no balloom payments Often a business will grow through the purchase of anothetr company, additional inventory and new equipment. All of thesed can be financed with anSBA loan. If you choosew the right financial services company tohelp you, getting an SBA loan can be the easiest part of growing your business. First determine if the financial services company is aPreferresd Lender.
That’s a designation from the SBA that empowerd the company to handle all aspectzs of theloan process, from makinvg its own credit decisions to funding the Your file isn’t sent to a government office for instead, the SBA trusts the Preferred Lender to make the Becoming an SBA Preferrexd Lender is based in part on a financial servicesd company’s ability to illustrate a long historyu of good judgment and a solidx credit review process.
The Preferred Lender designation isthe SBA’s way of sayingh that a specific lender is more qualifiedd than others to make the right Since the Preferred Lender makee the decision on a loan application, your SBA loan is processex quickly and you get a decisio n within days. Once you decide an SBA loan might be righf foryour business, what should you bring to the application interview With an existing business, it’as important to bring your financial historhy – the past three years of busines s and personal tax returns, cash flow your current income statement and balance sheet and a personal financiap statement.
If you have a startup business, you shoulf bring your business plan, along with your personap financial history. Most financial services companiesz also require a detailedr breakdown of project costs and how the fundd willbe used. Real estate and construction loans usuallhy require more documentation than equipmeng and workingcapital loans. There are many SBA lendingf products, so you’ll want to work with a financiakl services adviser who is an SBA specialisf and is familiar with the cons and requirements of all SBAlending approaches.
The specialist can help you determinr the type and size of loan you need to meetyour company’sa unique circumstances while ensuring your company has sufficient cash flow to support the proposed debt. Given today’s incentives, this migh be the right time to investigate the possibilitty of anSBA loan. You coulfd find that an SBA loan is just the ticketr to put your business plans into actiob and get your dreams backon
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