Small Business Administration Loans
As a new business owner searching for a start-up fund, perhaps you have considered getting small business administration loans. However, before SBA reviews your loan application, your bank must first approve this. Hence, what are the criteria that your bank is looking for?
Your personal financial capabilities will be assessed and this includes your business or personal assets. This way, the lender may know how you may be able to secure sb administration loans.
• Good Credit History
A good credit score is a vital factor in getting sb administration loans. If it is not possible, you can try improving or working on it. If not, you can compensate by showing a cosigner, detailed business blueprint, higher co-investment or collaterals.
• Ability to Handle and Compensate
Your resulting enterprise must be able to profit enough money to repay your sb administration loans. This can be planned well with correct financial projections on your business plan.
Aside from a down payment and a good credit history, collateral, such stocks, house, or other key possessions, must be shown if your bank needs security in case you cannot repay the sb administration loans.
• Excellent Business Plan
A fairly conservative and credible business concept is what lenders assess before they risk their money on your enterprise.
The more you have experience in the business industry, the better. Apparently, banks are more willing to approve your loan application if you are about to open a business that is related to your specialties—such as a physician opening a private clinic.
• Entrepreneur’s Investment
It is rare for lenders to finance 100% of your enterprise since you are expected to bring in about 20 to 40% of the start-up fund from your own pocket. The higher the amount of your personal investment is, the more possible it is for lenders to entrust you a small business loan.