7 Reasons You Should Apply for SBA Loan Assistance
Cash flow is the number one reason why small businesses fail, so managing your cash is essential. But disasters, like hurricanes or pandemics, can make it hard to keep the money rolling in.
Luckily, programs like SBA loan assistance can help you maintain your business. You can get the funding you need as you recover from whatever disaster comes your way.
Keep reading to learn why you should apply for an SBA loan.
1. Pay Consistent Expenses
If you are having a hard time paying for consistent expenses, SBA loan assistance can give you the money for payroll and benefits. You can continue to pay employees for paid sick leave as well as when they go into work.
Business owners can look at different types of loans, such as the Economic Injury Disaster Loan (EIDL). The loan comes straight from the SBA, and it can fund normal operating costs.
If you experience a disaster causing you to miss payroll, for example, the loan can cover that. The EIDL can also cover any other expense you would have been able to pay if the disaster didn't affect your business.
You can also use it to cover the rent on your office space or store. And if you have full-time employees with benefits, you can use the funds to cover that.
2. Cover a Disaster
You can use SBA loan assistance for various types of disasters. It doesn't matter if the disaster physically damaged your business or not; you can get financial relief.
If your store did incur physical damage, you could use a loan to pay for repairs. You can also use the loan money for operating expenses after a declared disaster.
While not a disaster per se, you can also use SBA loan assistance if you have active military employees. The loan can cover expenses you incur when an employee has to go on active duty leave.
Even if you can afford to cover regular expenses, you may have more costs to consider. Many loans are flexible enough to cover different types of disasters that could financially affect your business.
3. High Loan Amounts
Some types of loans have low maximum amounts, making it hard for small business owners to get the funds they need. But SBA loan assistance is more flexible, so you can get more money for your business.
Many SBA loans have a maximum of $150,000, but some loans can go up to $2 million. You can get a bit of money for a small disaster, or you can get more if you need more money to keep operating.
Consider how much money you lost from the disaster. Then, you can apply for as little or as much aid as you need.
You'll be able to pay the loan back over a long period, so you can grow your business. If you aren't sure if a loan is right for you, just apply. You never know what funding you could get.
4. Lenient, Affordable Terms
SBA loan assistance is perfect for small business owners who need lenient loan terms and affordable interest rates. The EIDL has a 30-year loan term, so you don't have to worry about paying it back quickly.
You can defer your payments for the first year, but interest will still accrue. But if you have the money, you can make payments that year without any penalties.
The loan interest rates are also relatively low. Businesses can get loans with a 3.75 percent interest rate, and SBA loan interest rates for non-profits are 2.75 percent.
If your loan is less than $25,000, you won't need to provide any collateral. However, you will need collateral for loans that exceed that amount. Still, it can be worth it to keep your company up and running.
5. Get the Money Quickly
One of the types of loans available is the SBA Express Bridge Loan. You can get the money within a few days of submitting your application, so it can get you through until you get more loans or revenue.
The loan can be up to $25,000, so it may not be enough to cover everything. You may need to combine it with an EIDL or another disaster loan.
But the loan doesn't require as much paperwork as some bigger loans. You can apply easily and get some money soon, so you don't have to shut down your business.
If you ever get to the point of needing more money fast, you should consider an SBA Express Bridge Loan. It's not the perfect solution, but it's an option.
6. No Credit Requirement
Many SBA loans come from private lenders and banks, but the SBA backs the loans they give business owners. Because of this, you don't need as high of a credit score as if you went to your local bank for a loan.
And if your loan application does get rejected, you can get help to have the SBA reconsider your loan. You can also work with an advisor to help increase your loan amount if necessary.
Whether you have a good credit score or not, your business needs help. Don't let your credit history keep you from applying for SBA loan assistance. You can consider multiple types of loans, so you can get enough cash to operate your business.
7. Easy to Apply
One of the best reasons to apply for SBA loan assistance is that it's easy. You can apply online, by mail, or you can go in person to meet with a loan advisor.
An advisor can help you explore your options and apply for the best loan for your business. There are many types of disasters and just as many loans out there, so it can be confusing.
But you should apply for an EIDL or a similar SBA loan to get started. And if you realize you don't need the money, you can pay the loan back sooner rather than later.
Your Key to SBA Loan Assistance
For many business owners, loans can seem scary. But many small business owners may need SBA loan assistance to stay in business, so loans are nothing to be ashamed of.
If you've recently experienced a disaster or another event that crushed your finances, you can get some financial relief. You just need to take the steps to apply for funding.
Do you need help getting an SBA loan? Schedule a consultation to get the loan you need.