subject: Sba Business Loan - Do You Qualify? [print this page] The type of small business loan you apply for depends on a number of factors ? the amount of money you need, your credit history, your operating cost and so on. Even when you identify just the right kind of loan for your needs, there is still the important matter of qualifying for the loan. As they say, there is many a slip between the cup and the lip and nowhere is this more pertinent that when applying for financing.
The SBA business loan is a government initiative to offer support to small businesses that are struggling for finances and cannot get a loan from traditional loan financing agents. When a borrower qualifies for the SBA loan scheme, then, they will find that lending agencies are more than willing to provide them the financial assistance they need. So, how do you know if you qualify for an SBA business loan?
1.The first thing you need to qualify for a small business loan is to be a small business and provide proof that you are one. If the business is too large for SBA financing, then, it will have to look for alternative sources of funding.
2.According to the SBA, a small business is a business that has not established leadership in its niche and is owned and operated independently.
3.When deciding the size of the company the SBA also takes into account the applicant as well as their affiliates. In order to determine whether there is a relationship of affiliation, the SBA considers aspects such as management, ownership and previous relationships. In most cases, a wholesale business cannot employ more than 100 people and a manufacturing business cannot employ more than 500.
4.In case the applicant intends to use the money to buy another company, then, the size is taken as the combined size of the existing business and the business that is to be taken over.
5.However, the SBA business loan is somewhat flexible regarding the size if the borrower agrees to make use of all of their finance within a labor surplus area. The Department of Labor has demarcated certain areas as labor surplus areas.
Before applying for an SBA business loan, the applicant has to submit certain forms that help the SBA in determining the size of the business. Over and above these, the SBA may request further information about the applicant.
The SBA offers different types of loans. A review of the SBA business loans can help you make a decision about the best loan for your business needs.
In many cases, small businesses may find it difficult to apply for SBA business loans because of procedural difficulties. For some kinds of loans, businesses are required to submit a detailed business plan. The business plan should aim to put the business and the finance in proper perspective by discussing various factors like security, required capital, utilization of funding if it is approved and so on. In short, it is a complicated procedure.
That is why most small businesses prefer to use the services of experts if they want to apply for SBA business loan.
by: getmebusinessloan
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