Sba Loan Research Paper

756 Words2 Pages

The biggest hurdle for most small businesses is accessing money to start or expand, and it can make the difference between success and failure. Of course, great personal credit will make funding your business easier, but there are business loans available from many different places; you just need to know where to look. Small Business Administration (SBA) - SBA loans are set up to help small business owners, but the execution of the program is challenging. Still, if you have time and patience, SBA loans have great terms. Put together a substantial business plan before applying and expect to wait several months for an answer. There are several different SBA loan types available, with loan amounts available up to $5 million, and rates are generally tied to market rates. The exception is microloans, which typically carry rates from 8 …show more content…

They’ll set up your financing as either an open line of credit or as a 5-year installment contract. Great personal credit is necessary, with no negative credit within the past two years, and a 700+ credit score.

P2P Lending - Peer-to-peer lending platforms can be a great place to secure financing for your business. Typically, they’ll consider financing $50,000 to $500,000 over a two to five year term at rates ranging 9 to 21 percent. To qualify for a P2P loan, you generally must have a great credit score and another source of income besides the new business.

Equipment sale-leaseback - Many small business owners have lots of machinery or vehicles that can be used to help fund the business. You can receive 40 percent of the value of your equipment upfront, and then pay the money back over 2-5 years. There are some definite perks to these arrangements: since you have collateral, qualifying is very easy, and because these transactions are leases, they are great tax writeoffs as operating

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