Whether you’ve been thinking about turning your marketable skills into a profitable business for a while or recently opened your doors, financing is a topic you’ll revisit throughout the lifecycle of your business.
Outside funding may be needed to start or purchase a business, buy additional equipment, or help with cash flow. Using a U.S. Small Business Administration (SBA) Preferred Lender for your financing needs makes the lending process more accessible while providing additional benefits unavailable through traditional commercial loans.
While SBA loans are guaranteed by the U.S. Small Business Administration, SBA Preferred Lenders can make the lending decision locally. This means borrowers benefit from the personal service available through a local lender.
SBA financing isn’t limited to businesses with large annual revenue or several years of financial statements. Many smaller, for-profit, creditworthy businesses are eligible. And, many types of businesses are eligible including manufacturers, franchisees, and retail and service providers.
Here are five additional reasons an SBA loan may be a great fit for your business.
Funding isn’t limited to existing businesses
SBA loans are designed to support startups and established businesses. Small companies and startups can access the funds needed to open their doors. With longer repayment terms, SBA loans can come with lower payments, leaving more cash at hand from month to month.
SBA loans have specific guidelines for startups. Our team of experts is here to help you understand all the details. You’ll want to have a business plan and projections ready so we can get to know your business.
Loans are available when they may not be otherwise
SBA loans can make funds available in some cases where a conventional business loan may not be the fit. For example, partial or limited collateral may be possible, which can be a benefit for service-based businesses that don’t have many physical assets. Down payments may be lower than conventional business loans, making funding more accessible. Also, you are not excluded from an SBA loan for having less than two years of business tax returns.
Borrowing limits are greater than most people realize
With loan sizes up to $5 million, entrepreneurs can dream big. Most franchise businesses and for-profit small businesses are typically eligible for SBA guaranteed loans. And keep in mind that “small business” can still mean 500 employees in certain industries.
Loan terms are affordable
When compared to conventional loans, an SBA loan offers longer terms, which often means lower monthly payments. Loan fees, which vary by loan amount, can even be financed into the loan. With competitive interest rates and lower down payments, starting or growing your business becomes less about “how” and more about “when.”
Use funds where your business needs them
There are a variety of ways you can use an SBA loan:
- Purchase machinery, inventory and office equipment
- Fund a business acquisition or franchise
- Cover the costs of technology upgrades
- Expand facilities
- Finance real estate for your business location
- Provide working capital
- Restructure existing debt obligations
- And more…
SBA lenders understand the unique needs of small business owners. Whether you’re still in the planning stages or looking to expand your business, financing options are available. As an SBA Preferred Lender, The Bank of Missouri can help your business tackle new opportunities with confidence.