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Getting a business loan for your startup takes a lot of effort. But to make sure that you are making an effort in the right direction, it is advisable to turn to Small Business Administration (SBA) if you are in need of small business loans for a startup.
Getting loans from SBA is a long-lasting process. Therefore, those who are in need of instant money should not wait for their loan approval from SBA. Whereas, if you have a lot of time in your hands there is no better source than SBA to fulfill your credit requirements for your small scale business. As it is quite obvious, for the purpose of sanctioning your loan file, you should have the entire documentation ready and organized at your sleeves so that you can handover the same to the loan officer whenever he asks for it, thus avoiding further delays.
However, amidst all of this, a few things to note while applying to SBA for loan approval are that you should have a sufficient credit score, proper collateral, and lastly, you should be in business for a sufficiently long time. If you fulfill all the above-stated criteria, we can assure you that applying for small business loans for a startup from SBA is worth the time and effort. Here are a few reasons to support the cause.
- Lower interest rates: SBA grants its customers the lowest interest rates in small business lending so far ranging from 4.39% to 13%. The interest rate varies from person to person depending on the type of SBA program you have applied to, the amount of loan you are asking for, and lastly your repayment terms.
- Repayment terms are favorable for the customers: Unlike several other money lending sources, SBA provides its users with generous repayment terms. In the case of SBA, one does not have to worry about repaying his loan on a daily or weekly basis. Rather, SBA allows you to pay back your loans in monthly or yearly installments. Currently, you can take up to 7 years, 10 years, and 25 years to repay your working capital loans, equipment loans, and commercial real estate loans respectively.
- Allows a wider range usage of loan money: SBA does not put any limitation on the usage of loan money provided to a customer. He is not bounded by any law or piece of paper to put loan approved money into a particular task, he is free to utilize the money in several other ways as long as it is for the purpose of business.
- Provides mentorship and training: The best part about taking a loan from SBA is that they will help you boost up your skillset and knowledge if you lag at a certain point in your business. In this way, they ensure the training and mentorship of their customers by having their back.
- Grants affordable funding: SBA acts as a savior if you are in search for small business loans for startup because in most cases, banks and other sources refrain from providing small scale businesses with loans, and rather invests the same money on some giant companies as they think that they are more likely to succeed in their venture.