If you are looking to secure funding for your small business, you will want to consider applying for an SBA loan rather than a traditional business loan. This is because SBA loans offer several benefits that are designed to specifically benefit small business owners such as yourself. Keep reading to learn more about three of these benefits and how they can help you grow your small business.
Benefit #1: Lower Interest Rates
Interest rates are a very important factor to consider when comparing loan options. After all, the interest rate associated with your loan will have a major impact on how much you will need to repay over the life of the loan. While there are many different factors that go into determining what interest rate you will be offered as part of your loan, SBA loans traditionally offer much lower interest rates than standard business loans. This can help to drastically reduce your cost of borrowing money so that you are able to pay off your loan more quickly.
Benefit #2: Easier To Qualify For
SBA loans are designed specifically so that small business owners are able to meet the requirements to qualify for funding. Consequently, these loans will often allow applicants to have a shorter amount of time in business and smaller annual revenues than may be required by a traditional business loan. Additionally, SBA loans can often be obtained without the need to have collateral to secure the loan. This is important since many small business owners choose to lease commercial real estate rather than purchase a property to house their business. All of these factors combine to make SBA loans easier for the average small business owner to qualify for.
Benefit #3: Build Business Credit
It can be extremely difficult for small business owners to build business credit. This is because many of the financing products that are available to small business owners rely solely on a personal guarantee. Consequently, paying off these loans will only result in a boost to your personal credit, rather than actually allowing you to begin building business credit. While you may still be required to provide a personal guarantee when obtaining an SBA loan, you will also find that this type of loan does allow you to begin building business credit. This is because the Small Business Association does report information regarding their loans to both personal and business credit bureaus. Learn more about the benefits of sba loans by contacting a professional loan service near you.Share