This past week we have been featuring bits from HVACChannel.tv’s program “When to go to the Bank.” Our fearless leader, David Crary, was featured on the program, along with Ruth King from turnonmyfinanciallightbulb.com. The two discussed what is required of a small business to get a loan from the bank. You can view the post on small business growth strategies involving loans here.
Crary also mentioned that applying for an SBA loan is a good idea if you are in the need of a loan. SBA stands for Small Business Administration. SBA loans are great options for those who want to start or expand a business, but are having trouble qualifying for a traditional bank loan.
In the simplest terms possible, an SBA loan is a guarantee. Basically you apply for an SBA loan. If approved, you receive an SBA guarantee. This guarantee represents a portion of the loan the SBA will repay to your bank if you default on your loan payments. So to be clear, the SBA does not provide direct loans. As Crary puts it, an SBA loan transfers part of your risk to the SBA.
The most commonly requested SBA programs are:
- Starting and Expanding Businesses
- Disaster Loans
- Export Assistance Loans
- Veteran and Military Community Loans
- Special Purpose Loans
Information provided from the U.S. Small Business Association, SBA.Gov
The SBA provides a check list on their site. The checklist provides a list of documents you will need to provide for your application of the loan. Click here to view the SBA Loan Application Checklist.
As always, we suggest you speak with professionals within your bank and the SBA to ensure you have all the accurate information needed. This is simply starter information for those considering the loan and still unsure of the basics!