SBA loans can be transformative. Applying for and accessing the funds you need to start your small business is a significant thing on your to-do list when initiating business operations.
You’re probably keenly aware that getting your SBA loan can be the difference between getting operations off the ground and your business going nowhere. It’s frustrating that finding, applying for, and securing the right SBA loan can be complicated. But partnering with a community bank can help.
Here, we’ll get you the practical details you need to succeed—starting by answering a fundamental question: what is the SBA and what types of loans does it have for you?
The SBA and SBA Loan Types: A Refresher Course
The U.S. Small Business Administration (SBA), is an independent agency created by the federal government. It exists to help small businesses grow.
The SBA offers various loan products to help small business owners get started. Here are some of the most common types of SBA loans:
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7(a) loans: relatively flexible loans that provide financial assistance for many purposes, including equipment and working capital.
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CDC/504 loans: provide fixed-rate, longer-term financing to facilitate real estate and large asset purchases.
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Export loans: help small businesses expand their ability to export effectively.
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CAPLines: help businesses secure revolving lines of credit that can help them meet shorter-term working capital needs.
One of the first steps in getting started with your SBA loan is figuring out which loan is best for you and your goals. Here are a few questions and answers to help you decide.
Which SBA loan should I apply for?
You can determine which SBA loan to apply for by considering your business’s needs, eligibility, and repayment ability. Then you can compare this information to the types of SBA loans available.
Are any of these SBA loans easy to apply for?
No, none of these SBA loans are considered easy to apply for. Applying for an SBA loan is an involved process. Working with a small community bank to have support at every stage of your SBA loan application can reduce your mental burden.
What is the most popular type of SBA loan?
7(a) loans tend to be the most popular. With this loan, small business owners can secure financing for many different purposes, including working capital, equipment, and real estate. In addition to that flexibility, these loans may come with longer repayment terms.
If you’d like some help determining which loan you should select, you’re in the right place. Our team is very experienced with SBA loans, and we’d be happy to schedule a meeting with you to review your goals and discuss the various loan types.
How to Get Started with the Right SBA Loan for Your Small Business
Once you’ve determined which SBA loan is best for your small business, it’s time to take the first steps down the road to your SBA loan.
These steps include:
Gather your documents and starting materials.
You'll need several things to complete your SBA loan application, including a business plan and financial statements. You’ll also be required to participate with an equity injection. How much you’ll need for that equity injection depends on the circumstances and your lender. 10 percent is common, but work closely with your SBA lender to determine the right amount for you.
Find a great lender.
Having a communicative SBA lender will transform your loan application experience. Ask your prospective lender about the support systems they have in place to help loan applicants and make sure you feel comfortable with the people you’ll be working with.
Access your funds and initiate repayment.
If your SBA loan application is approved, great! You’ll have the funds you need to grow your business. But that’s far from where this journey ends. You’ll need to make sure you can make payments properly and use your funds wisely. Your community bank can help you realize both of those goals.
BNC National Bank is Ready to Help You Find the Right SBA Loan for Your Business
Is it time to level up your business? If so, an SBA Loan may be in your future. If you need help selecting the right loan or want to work with a responsive team as you submit your application, BNC National Bank is here to help. Give our friendly banking professionals a call to discuss any questions you may have, or schedule a meeting with our team at your convenience.
Interested in learning more about the SBA Loan process? Here’s a free resource for you: 4 Stops to take on the Roadmap of an SBA Loan.
