Small Business Loans: Loan Eligibility
Millions of Americans work for themselves in small businesses, but how do they get a small business loan?
The process of getting the loan can be complex, but it can be worth it.
If you take your time to carefully run the application, it will be easier.
Creation of a financial plan
What are small business loans?
This is part of the Small Business Administration loan programs.
The name comes after Section 7(a) of the Small Business Act.
The purpose of these programs is to help small businesses that are making a profit and cannot get loans or financial assistance anywhere else.
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Who can get small business loans?
Loans are granted based on the business, not the owners.
The SBA makes its loans to businesses, on behalf of the business.
Not the owners of the company.
Requirements for getting small business loans
- Meet the standards set by the SBA
- Must be for profit
- You must not already have the ability to provide financing
- You must be able to prove reimbursement
There may be other criteria you need to meet in addition to this.
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You will need to get your credit score to see if you qualify for these types of loans.
There are some cases where it may be better to get a business loan online from lenders.
This is true for anyone who lacks collateral.
This can also be true if you need the funds immediately or if you haven’t been in business for a long time.
Small online loans range from $1,000 to $5 million.
Loan term can be up to 25 years for real estate and 7 years for SBA working capital.
The highest amount you will see from the SBA is $2 million.