SBA LOANS
Our goal is to help you achieve your goal.
Let'sShare your financial burdens and with you.
Our goal is to help you achieve your goal.
Let'sShare your financial burdens and with you.
SBA Loans are part of a program created by the U.S. Small Business Administration (SBA) in order to help fund entrepreneurs like you. However, the difference between an SBA and other loans is that it’s a guarantee from banks and certified lenders. This means the SBA doesn’t actually give you money. But rather, they determine guidelines for lenders and guarantee applicants up to 85% of the loan. This way, the lenders remain protected from potential defaults and it allows for them to provide funding for entrepreneurs with very little risk.
For entrepreneurs like you, there are a few types of SBA Loans. The main two are the 7(a) Loan Program and the CDC/504 Loan Program. To help you out, we’ll explain what each of them does.
The 7(a) Loan Program is pretty flexible for your entrepreneurial needs. However, the primary uses include: refinancing existing property, purchase new property, revolving funds, equipment purchases, working capital, and the purchase of real estate. You can receive upwards of $5 million in guaranteed financing and applications are processed through banks, certified lenders, and credit unions.
The CDC/504 Loan Program is primarily used by Entrepreneurs like you for project funding. When your loan is approved, you’ll receive 50% of the money from the bank and 40% of it from a Certified Development Corporation (CDC). In this instance, project funding means fixed assets, and some fixed assets include: buying equipment, buildings, land, building/renovating new/existing facilities, landscaping, and debt refinancing due to renovations/improvements. You can receive upwards of $5 million in finances and applications are processed through non-profits and private-sector lenders.
Small and new businesses can qualify for an SBA loan. However, SBA loans depend greatly on your credit score. Business owners with great scores and a good borrowing history are the most likely candidates to get qualified.
When you’re looking into loans, First Share, LLC looks at the Three Cs: Credit, Cash flow, and Collateral. You’ll want to have a credit score between 600 and 800– with an ideal score of 680+. But we’ll also look for a minimum account balance of $5,000 – $15,000 for monthly cash flow (but also look at tax returns, profit, and annual revenue). As for collateral, we prioritize unsecured funding; however, collateral is just one option. As long as you have one of the Three Cs, you’ll qualify for a loan.
It’s important to understand that businesses younger than 2 years or guarantors with poor credit scores will have a harder time qualifying. SBA lenders need to know you’re reliable and not a risk.