SBA Loans | 3 Things to consider before Getting an SBA Loan

Jan. 1, 2010 - PRLog -- In the past year more small business owners are looking for ways to capitalize their business concerns. With the down turn of the banking industry many have turned to the Small Business Administration for funding. With many loans having the backing of up to 90% guarantee from the SBA, banks would otherwise not lend to small business. The approach of small business has change and now many are looking into this type of loan as the first option rather than a last resort. The following 3 things should be considered when looking for the SBA loan guarantee.

1. Time to funding. This can be a problem as many businesses wait as long as they can before applying for a loan. With any government entity you can expect some strange things to make its way into the loan process. Paper work and verification of everything and anything should be expected. In some cases it can take up to 2 times as long to fund an SBA loan than a more conventional mortgage. The commercial lender will want to make sure that the guarantee is in place before the money is dispersed. The bank will be the one responsible if the guarantee is not met.

2. Be prepared to do a lot of paperwork. This comes without saying that anytime you deal with the government you will need to come up with some paperwork that you didn't even think of. This is something that you can expect from the SBA 7a loan program http://www.sbaloans-123.com/sba-7-a-loan-program , however one of the things that many small business owners can do before applying for the loan is become educated on the minimum documentation that you will need. Much of this paperwork you should have, if you do not you need to be doing this anyway. Simple things like a cash flow and a P and L statements are the fundamentals of a successful small  business. Make sure that you review some of the required paperwork.

3. What loan type do you need? The Small Business Administration has many programs that your business could qualify for. To learn more about commercial lending visit  SBA 504 loan program http://www.sbaloans-123.com/sba-504-loan-program . One of the challenges is to understand what type of loan would be the best for a small business. Each loan type has its different purpose for the varying needs of a particular small business. Take some time out of your busy day and learn what the differences are. It is also helpful to work with a commercial lender that has experience with the SBA program and has working knowledge of things like the requirements for the SBA 7a loan. http://www.sbaloans-123.com/sba-7a-loan-requirements

To recap the 3 things that you most do before applying for an SBA loan should be 1. the loan may take some time to get funded, 2. the paperwork will be a challenge and 3. know the types of loans that the SBA has to offer the small business owner. Education will only help with the SBA loan process.