What is an SBA Loan
But what in fact is an SBA loan? And is it something that will help you create business success? First off, the SBA loan is a bit of a misnomer. In fact SBA stands for Small Business Association. And the organization itself doesn't in fact hand out loans to small businesses. Created in 1953, the purpose of the SBA is to help ensure competitiveness in the marketplace by educating small business owners regarding the process of getting business loans and also will aid them in approaching banks and other lending institutions. The idea here is that ultimately the success or failure you have in obtaining a loan comes solely from how prepared you are. But, the SBA will help you get prepared and teach you what you need to know in order to put your best foot forward.
So, if an SBA loan is all about education, you might be wondering if it will help you? After all, you just want a short term loan to start your business, you don't necessarily want to go back to school to get it right? The problem with this "shortcut" style of thinking is that it will inevitably lead to problems for you down the line. Consider for a moment that with the current state of economy, banks and other lenders are tightening up and changing the requirements that must be met to obtain a loan. In order to be successful in this endeavor, you need to know as much as possible about all the processes and procedures that go into an SBA loan, as the more you know, the better impression you will make on the banks.
With that said, an SBA loan is something that is vital to your business as it will enable you to get the knowledge necessary to obtain the funding you need. If your lender of choice has the inkling that you don't know what is required of you, then your chance of getting that loan will become very low indeed. There are several different loan programs run by the SBA as well, and knowing which one you need is the first step to gaining the knowledge (and the loan) to sustain your business long-term.
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