What You Need to Know about SBA Loans
There are some things you should really know SBA loans. If you’re about to go into business for yourself or are looking to expand, you[‘ve probably heard about the Small Business Administration.
It’s an institution which exists to help small companies establish a presence, grow, and thrive. But, it’s not actually what most people believe it is (though these facts should be well-known). Yes, the Small Business Administration does assist companies in many industries with different needs, but it does so in a way that’s not like most people realize. With this in-mind, let’s take a look at what you need to know about SBA loans.
What You Need to Know about SBA Loans
Okay, we’ll begin with the first thing you ought to know about the SBA -- did does NOT loan money. That’s right, although you might hear about SBA loans, the governmental entity itself just doesn’t loan money. Instead, it helps connects businesses to lenders who generally offer one of three types of business loans: 7(a), CDC/504, and microloans. Each of these are different and suit various needs.
For instance, 7(a) loans are for purchasing just about anything. While the CDC/504 are intended for large assets, like equipment or even for commercial real estate. Microloans are also for purchasing anything but are the smallest, averaging just $13,000.
But, these aren’t the only thing you need to know about SBA loans. Here’s a little more you should know about SBA loans:
●      The SBA is a guarantor. Instead of loaning money, the SBA guarantees loans (generally ranging from 75 percent to 85 percent). This means two things: you’re not personally liable for the whole amount but you are personally liable for the remainder outside the guarantee.
●      Collateral is generally needed. The old adage “there’s no such thing as a free lunch” certainly rings true here. In most instances, the borrower must pledge collateral in order to obtain financing.
●      Interest rates might be higher. Just because the SBA helps small businesses doesn’t mean they set the terms of loans. That’s still up to the actual lenders. As a result, interest rates can be competitive or higher than if you go directly through a lender.
●      Not all SBA loans perform the same. As stated above, the three SBA loan types function differently. But it’s also important to note that there are other choices. For instance, dealing directly with a small or regional bank might yield better terms.

Article courtesy of Bruce Myles. For more information about SBA Loans, see his site.

Comments

Post a Comment

Popular posts from this blog

Construction to Permanent Loan Process The construction to permanent loan process isn’t as scary or complex as people might think. If you’re considering building your dream home rather than trying to hunt down a resale and buy it, you’re certainly not alone. Even if you’re more partial to the building instead of buying a newly constructed home, you’re probably wondering how the financing works. So, let’s take a look at the construction of the permanent loan process. Construction to Permanent Loan Process The construction to permanent loan process isn’t all that difficult to understand. In fact, all fancy lingo aside, it’s quite easy to grasp. For your benefit, here’s a quick look at the construction to permanent loan process and what to expect. Construction Loans Explained Home construction loans are a form of short-term, higher-interest financing used to pay for the building of a residential house. These differ from traditional homes because they are not based on
Read more
Should Long Term Real Estate Investors Focus On Cash Flow or Growth? SAN ANTONIO - Jan. 25, 2017 - PRLog -- Per Bruce Myles, owner and founder of Proactive Commercial Lending Group , LLC,"a Texas Commercial Lender,"To answer this question, it's best to first define what the two terms mean. Cash flow, of course, is the net money gain/Users/denny/Desktop/ALL LEAD INS/PRESS RELEASE LEAD INS.txted or lost on a monthly basis. One mistake many rental property owners make all too often is believing just because the rental charge covers the mortgage expense, they are "making money." However, that's simply not the case. The rental income must not only cover the home loan payment, but also, the property taxes, insurance, and other carrying costs. As for investors who buy real estate to rehab and flip, underestimating the costs of renovation causes undue financial strain. It not only causes many to hold longer than they first intended, it also puts them in a anxi
Read more
Hard money loans for real estate investors. Hard money loans for real estate investors provide more alternative forms of financing that are very advantageous in more than one way. In fact, hard money loans are a great go-to source for capital investments because these present a convenient acquisition strategy. So, let’s take a look at what hard money loans are and why these are often used by savvy real estate investors. Hard Money Loans Explained We’ll begin by explaining what hard money loans are and how they work. Compared to traditional bank financing, these are quite different. These are private debt instruments, funded by a group of investors. Put another way, a group of diverse investors pool their money together and loan it out. In return, they earn a profit while giving loan recipients some big benefits. Because of the source, this means there’s far less red tape to wade through and that’s a good thing for borrowers. Hard Money Loans for Real Estate Investo
Read more