4 Stellar Benefits of Using SBA Loans To Grow Your Small Business
Business owners know that in order to be successful and make money with their business, they need to be able to invest money into their own company. While it’s possible to get things off the ground with nothing more than your personal savings, those savings aren’t always going to be enough. SBA loans backed by the Small Business Administration are a great option for qualified borrowers. Here are a few benefits you can expect from these types of loans.
1. No Restrictions on Use
Believe it or not, there are many loans that have restrictions on how you can use the money you borrow. For example, money from construction loans can only be used to finance new construction or building expansions. When you take out an SBA loan, you’re free to use the money however you see fit. The SBA doesn’t place restrictions on use. They just expect you to pay the loan back in full by the end of the loan term.
2. Flexible Repayment Terms
The SBA understands that profits can ebb and flow and this change can make it hard to stay up-to-date on your payments each month. That’s why they offer more flexible repayment terms for many of the loans they guarantee. If you ever find yourself struggling to make payments, you can call your lender and discuss your options. Chances are that they’ll be able to modify your repayment plan until business picks back up.
3. Easier to Qualify For
Traditional business loans issued by most banks are a great option if you can qualify for them. However, those lenders prefer to work with businesses that have a long and established history of continued profits. If you’re new to the industry or don’t have stellar personal credit to use on your application, it can be almost impossible to qualify for a business loan. The SBA loan program has much looser requirements and is happy to work with borrowers that may not otherwise qualify for a loan.
4. Low Interest Rates
The biggest benefit of the SBA loan program is that the SBA guarantees the loan itself. This helps businesses qualify for loans with significantly lower interest rates than they’d receive with a traditional business loan. Interest rates will still vary from lender to lender, so it’s best to get quotes from several banks. Compare their quotes and choose the lender that offers you the money you need at the lowest interest rate.
SBA loans are a wonderful choice for small business owners. If you’re looking for money to finance your business, you’ll experience these benefits first-hand.