Why You Should Consider SBA Loans

If the financial future of your business rests on an uncertain foundation, you might want to consider a commercial loan from the U.S.’s Small Business Administration. What’s unique about SBA loans is they’re offered by banks and backed by the federal government. Even though this type of loan is a sound option, it’s not unusual to hear of business owners instead opting to apply for a traditional commercial loan. Do yourself (and your business) a favor and learn the benefits of an SBA loan.

Making a Way Out of No Way

The number one reason to give strong consideration to an SBA loan is that if can provide you with access to funds where traditional commercial loans fall through. If yours is a start-up business and you have yet to establish a viable financial and credit history, you’ll likely have quite a hard time finding a lender willing to take a chance on you and offer you a loan. SBA loans make for great alternatives for those who find themselves in this category.

On the other hand, your business may be one that’s well-established but is simply going through a rough financial patch. With an SBA loan, you’ll be able to successfully restructure your commercial funds while taking advantage of the favorable terms, easier payments and longer loan maturities that come with an SBA loan. The same applies to business owners who are without the collateral that’s commonly required for standard business loans.

Provide Your Business With Backup “Insurance”

When the economy is sailing on choppy waters along with the uncertain value of loan collateral, lenders are often hesitant to underwrite loans. Simply because borrowers have collateral doesn’t necessarily mean that collateral will manage to retain its value throughout the life of the loan. With SBA loans, lenders and borrowers both have a Plan B that acts as a source of reassurance all parties involved.

What’s even better about this type of loan in such a situation is that it might be enough to persuade lenders to extend the terms of the loan, because they know there’s still the SBA loan to fall back on even if the borrower’s collateral doesn’t retain its original value. It’s not unheard of for lenders to offer loan terms that stretch out seven to 10 years when backed with an SBA loan.

SBA loans most certainly aren’t for everyone, but they can be just what your business needs to stay afloat. Be sure to explore every port in the storm to navigate the high business owner seas.

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