The US Small Business Administration has introduced different types of loans to provide financial assistance to startup companies and help them to run their businesses successfully. This government agency of the United States offers these loans to the startup owners who are not eligible to get money from banks or other traditional financial organizations. In fact, these funds are designed with the objective of supporting the growth and development of these companies and improving the economic situation of the United States. Here are a few essential facts that you should know about the lending options offered by the Small Business Administration.
No disposal of loan directly from SBA
SBA does not offer these funds directly to the people who want to borrow money for different purposes. In fact, the organization works in partnership with multiple lenders, community development companies and micro-lending agencies to offer the money. Plus, it takes the responsibility of determining the terms as well as regulating these loans.
Devoid of credit background check
Unlike traditional lending companies, the SBA does not check the credit records before offering the money. It means that you can get money with bad credit records such as insolvency, bankruptcy and so on.
Multiple loan programs
The loans offered by SBA are divided into different categories such as 504, Express, Patriot and 7 (a). These funds are offered to the businesses depending on their requirements and preferences. However, it is important to remember that the banks or other private organizations may not provide these funds. The loan programs might vary and the requirements are set on the basis of the individual terms or policies offered by the banks.
A great help for startup companies
Small companies are in need of these funds than the popular ones. The reason is that these companies have started their journey and do not have sufficient amount of money in order to make a good investment. It would therefore be difficult for them to get the loans at high rates of interest. Unlike traditional lending firms, the SBA offers them at low rates of interest, thereby allowing the borrowers to repay the money quickly.
Submission of necessary documents
In order to secure the funds, you have to submit necessary documents to SBA as well as the lending companies offering the loan. Besides these essential documents, you also have to complete other important formalities such as submission of financial statement, business plan, financial statements, documents related to tax return and other important information associated with loan acquisition.
Act as guarantor
The banks and other private financial organizations do not offer funds to the borrowers who do not have properties that can be used as collateral. For these borrowers, the SBA acts as guarantor. The guarantee offered by SBA provides these banks the assurance that these funds would be reimbursed quickly.
Fast loan acquisition
Obtaining small business funds from the Small Business Administration is a speedy process. They are like ready-made money that may be secured once you apply for them.
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