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Small businesses can get SBA loans, but need to have great qualifications

Can I Just Get an SBA Loan?

SBA loans are for really good credit borrowers and for established businesses. SBA loans are guaranteed by the U.S. Small Business Administration. The money lent by a bank anywhere from $5k to $5 million and if the borrower can’t pay the loan back, the SBA will.

 

SBA Loan Qualifications

To qualify for an SBA loan you need the following:

-Need to be in business for a minimum of 2 years

-Good credit history and a personal credit score of 600

-Sometimes will have to collateralize loan

-Detailed business plan and financial data projections

Although the rates on a 7 (a) SBA loans are very inexpensive (6-9% APR) and the terms can be extremely easy to manage (terms ranging up to 9 years), the application process is lengthy. Since the interest rates are so low, due diligence by the SBA and banks may take some time. SBA loans are good for businesses that have a proven track record and can also probably qualify for traditional bank loan. If the business needed faster working capital for a timely business opportunity, the SBA loan would not be a good choice.