| Business owners searching for a small business | | | | history. |
| association loan are usually referring to a loan provided | | | | A small business bank loan generally refers to funding |
| by the Small Business Administration (SBA). This | | | | provided by a traditional lending institution. When looking |
| government agency provides funding to small | | | | for small business funding, it's important to find a bank |
| businesses that have been denied by traditional | | | | that has loans tailored to a small business's needs and |
| lenders, such as commercial banks. | | | | capabilities. |
| The most common loan provided by the SBA is the | | | | Many providers of small business bank loans do not |
| 7(a) loan. In order to qualify, start-up businesses must | | | | have as strict requirements as with other types of |
| supply the following documents: a statement of | | | | loans. These banks may only ask to check an |
| financial need, personal financial statement from each | | | | applicant's credit reports, and, upon request, view the |
| owner, a list of collateral to be offered, and a Profit | | | | financial documents of the business and the applicant. |
| and Loss Statement. Existing business must provide | | | | Localized banks may require applicants to live in a |
| the following: financial statements (or tax returns) for | | | | certain area in order to qualify. Businesses are |
| past three years, a current and signed Balance Sheet, | | | | sometimes able to complete the loan application online, |
| and a statement of funds needed and how they will | | | | via the lender's website. Typically, it only takes a few |
| be used. Most applicants are also required to employ | | | | minutes to complete an application, and only a few |
| fewer than one hundred employees and to provide a | | | | days for the lender to review and approve the loan |
| business plan. Certain variations of the 7(a) loan may | | | | request. |
| require additional documentation or other criteria. | | | | Small business bank loans can usually provide up to |
| Small business association loans, usually referred to as | | | | one hundred thousand dollars to companies in need of |
| SBA loans, are available through lenders who | | | | start-up or operating capital. These loans can be |
| participate in the SBA's guaranty program. With this | | | | secured with collateral or unsecured. Unsecured loans |
| program, the SBA guarantees a certain percentage of | | | | rely on the borrower's signed promise to pay. If the |
| a loan made to small businesses to reduce the lender's | | | | borrower fails to repay a secured loan, the lender may |
| risk of not being repaid. Most commercial banks and | | | | seize the collateral. Although no assets are at risk with |
| several non-traditional lenders participate in the SBA | | | | an unsecured loan, failure to repay can result in |
| program. To find out if a particular lender provides | | | | additional fees and damaged credit reports. Repaying |
| SBA loans, either call them or check on the SBA's | | | | a small business bank loan on time can greatly |
| website. Loan amounts, interest rates, and repayment | | | | improve a business's credit and make it easier to |
| plans vary by lender and by an applicant's financial | | | | secure additional funding when the need arises. |