You have this great business plan. Now what do you do? You want to get your business up and running but you are running low on funds. There are quite a few options. One option is to look into a loan through the U.S. Small Business Association. There are three options: a basic 7 (a) loan, Certified Development Company (CDC) 504 Loan, and Microloan. Another option is to apply for a loan through a bank or even another financial institution.
SBA loans are loans you get through the U.S. government. A lot of loan supervisors who work at banks are there to help you with the process of getting a SBA loan. If you are unsure where to start when applying for a SBA loan, definitely go to your local bank branch and see if they have a loan supervisor who works with SBA Loans. They will help guide you through the process and most likely will have valuable advice. They can tell you if they think you are ready to apply for a SBA loan or if you should go and update some financial information or update your business plan to make it more sell-able.
In order to find out if you are eligible for a SBA loan there are some things you need to look into. One of those is making sure your business qualifies as a small business. You can go and look using the North American Industry Classification System Codes. that has all the information you need to see if you are a small business. Your business also has to be set to earn a profit, be in the United States, have some invested equity, use the funds for business related purpose, not be delinquent on any debts to the U.S. Government, and be able to show the need for the funds from said SBA loan.
Another option for loans other than SBA loans are going to a bank or another financial institution and doing a loan using your own credit as a backing for your start-up business. Most banks require the same information. Basic information – your basic information, credit score, financial records, a plan of what you’re going to do with the money, how you are going to repay it, a business plan with numbers and data. If you have a partner they will want their information as well.
When it comes to starting a business and applying for loans there are many options. The best advice you can ever receive is to make sure you research into all options and pick the option that is best for you and yours business. Do not rush into anything because you feel like you HAVE to, take the time to look at all the options, and make an educated guess.
Alexandra Binns-Craven is an urban farmer. Lexi is also currently enrolled in the Masters of Entrepreneurship Degree Program at Western Carolina University. Webmasters and other article publishers are hereby granted article reproduction permission as long as this article in its entirety, author’s information, and any links remain intact. Copyright 2016 by Alexandra Binns-Craven.