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How SBA loans help small businesses?
All bank small business loans are almost invariably from the SBA programs. Various schemes of SBA business loan programs are briefly as under.
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7 (a) loans cover most requirements including start ups.
SBA LowDoc loans for under $150,000 need.
SBA express loans
The Micro Loans
Caplines loans for short term and recurring expenses.
CDC 504 loans
EWCP - Export Working Capital Loans.
Having come thus far what remains is the decision on a particular organization that suits you. This is probably the most important decision of all especially for the start ups. Because the relation you begin with a loan might turn out to be a good one for you and probably eventually for ever. So, how do you decide on a particular organization that suits you best? What to look for in a lender? Here are some generalized check points you can use.
Decide on a lender in your area. Vicinity to each other makes understanding one easy to the other. More over innocuous things such as their working times and vicinity become crucial at times.
Some private institutions are not known for their ethical practices. But collecting information on this may not be as tough a task for you as running your business. Some of the hidden charges, costs and clauses can bind you down to a legal tangle in your inopportune time.
Some lenders, especially banks, provide flexibility in attaching your other accounts to the loan account (credit line). Though this is a good idea, you have to think of a situation when your credit line is running negative and the other account has insufficient funds at the moment.
You would want the officer managing your account to be reasonable and confident about you.
The rates of interest are almost always quoted in ranges. You would want your bank to charge you the lower of the range interest. This can be possible when you have a certain degree of relation with the bank developed over a period of time. The relation develops depending on your repayment history (including your previous loans, if any) and cash flow strength into your account.
Choosing a lender may not be a difficult decision as developing and maintaining a relation can be. This is especially important when you understand - if business generates money, you can not run a business without money either, on the contrary.
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