How to Choose an SBA Loan for Startup
The small business administration loan is usually for the small businesses as you might have guessed. For a good startup, you are probably thinking of how you can get the SBA loan. First, you have to make sure you have a well-established business. You are supposed to have a steady income so that you can be eligible for the SBA loan for startups. You should also make sure you have operated the business for some time. Your credit status will also determine if you can get the SBA loan for startups. These are the steps you should take when getting the SBA loan for startups.
You are supposed to know the categories of the SBA loans that there is. You have to consider the intensity of the operations of your business when choosing the SBA loan to apply for. You should know the differences in the SBA loans that you can apply for. You will be eligible for a specific amount in each of the SBA loans. The SBA loan types are also available for businesses with certain qualifications. You should make sure you match your business to the SBA loans to know the one you can go for. This will help you get the right amount of money to boost your business. The types of SBA loans for startups are as discussed below.
You should first understand how the Microloan program works. This SBA loan is meant for business owners that need a small amount of money to keep their business running. The loan limit of the microloan program of the SBA loans for startups is $50,000. The Microloan program is also a great option for the startup of non-profit organizations. The other type of SBA loans for startups is the 7(a) Loan. This type of SBA loan for startups is usually very flexible. The 7(a) SBA loan limit is $5 million. The loan usually comes with a return policy of 10 to 25 years. You will also be free to negotiate for a fair interest rate.
You should also consider choosing the CDC SBA loan. If you are sure you need a lot of money for the business, then you can choose the CDC. A business that wants to invest in machinery and also housing will need a lot of money and this is the kind that should choose the CDC option for the SBA loan. The CDC SBA loan allows the business owner to apply for a loan of up to $5.5 million. You will be given 10 to 20 years to make sure you have paid up the CDC loan that you got. You should negotiate for better terms of how you will pay the CDC SBA loan for your business startup