It can be a challenge to find the money to start your own small business. Many people have turned to the Small Business Administration (SBA) for help. In an Inc. Magazine titled, “Kickstart Your Business Dreams With SBA Lending”, author Bob House explored how business buyers can leverage SBA lending.
Basics Of A SBA Loan
House notes that the SBA does not provide loans itself. The SBA facilitates lending and even micro-lending with a range of partners. Since the government backs these loans, lenders are more willing to offer a loan to an entrepreneur. An entrepreneur, who may not typically qualify for a loan, may qualify for a SBA loan. The SBA will cover 75% of a lender’s loss if the loan goes into default.
Who Should Try To Get A SBA Loan
Entrepreneurs can benefit tremendously from a SBA loan. In some cases, a SBA loan can mean skipping the need for collateral. A SBA loan can be used for those looking to open a business, expand their existing business or open a franchise.
In his article, House points out that getting a SBA loan has a lot in common with receiving other types of loans. It is important that you organize your financial documentation. It should be clear to understand and ready to go.
A buyer needs to check that he or she qualifies for a SBA loan. Find a lender and fill out the necessary SBA forms. To be eligible for an SBA loan, the business must be a for-profit venture and do business in the United States. Once you have submitted the forms, it can take between 2 to 3 months to process and approve an application.
The SBA helps thousands of people every year. If you are looking to buy a business or expand your current business, working with the SBA could be what you need. Working with a business broker is a good way to turn the dream of owning a business into a reality. Working together with you, EBIT Associates will guide you through the steps to buy a business. We participate in the due diligence process, assist in negotiations with the seller and coordinate the documentation of the deal closing.