Understand the different types of financingįor most small businesses, operations are financed in three key ways (not including investments or loans from family and friends): Such loans are only available from specially designated intermediary lenders, which are non-profit organizations with experience in lending and technical assistance. According to the SBA, its Microloan program provides small businesses with small, short-term loans - up to $50,000 - for working capital, or to buy inventory, supplies, furniture, fixtures, machinery, and equipment. Such loans may have minimum dollar amounts, however, so if you need a loan for less than the lender’s minimum amount, ask your bank for a referral to a lender participating in the SBA Microloan Program. According to the SBA, the 7(a) loan is often the best option when real estate is part of a business purchase, but it can also be used for: short- and long-term working capital, refinance current business debt, or to purchase furniture, fixtures, and supplies. The specific terms of SBA 7(a) loans are negotiated between the borrower and the participating lender, subject to the requirements of the SBA. One example is the 7 (a) Loan Program, SBA’s most widely-used loan guarantee program. Many SBA loan programs combine business coaching and technical assistance, as well as access to financing, on more flexible terms. Small Business Administration (SBA) has several programs to help finance small business loans. For more information on monitoring your credit and scams targeting small businesses, visit FDIC Consumer News: Your Small Business Deserves Big Support.Ĭomparison shop for government-guaranteed loans Monitoring your credit report will also help you guard against identity theft, scams, and avoid unexpected credit issues when you go to apply for a loan. Monitoring your credit report can help you ensure that the information is accurate, and if not, then you can take steps to correct it in a timely manner. Many criteria go into a credit score, including your payment history and the number and type of loans that you have. For more information on credit reports and credit scores, visit FDIC Consumer News: Credit Reports and Credit Scores.Īn accurate credit history is important to building and maintaining good credit. A good credit score and history suggests to banks and other financial institutions that you have handled your finances well, and it can help you qualify for better loan terms, which helps save you money. Manage your business and personal credit well to increase the likelihood of being approved for a loan when you need it. Maintain a good business and personal credit history Showing proposed earnings can reassure lenders that a loan will be repaid. Start by having a well-prepared business plan. Improve your chances of getting a good loan To help you get a loan that fits your needs, these are some basics to consider on your road to success. New small business owners typically need to borrow money to buy equipment and supplies, pay employees, and otherwise finance their operations. Need a Loan for Your New Small Business? Get the one that is right for you
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