Many thriving businesses hit a point where they need to borrow money. Your business could be growing quickly but if all of its earnings are being reinvested in the company, you'll have little left to pay for the company's growth and expansion, like upgraded equipment, more raw materials, or new technology.
That's when a business loan can make a lot of sense.
However, securing a bank loan can be a challenge even for a highly profitable business, and even getting a small business loan can be difficult. Fortunately, the U.S. Small Business Administration (SBA) can help be the difference-maker in getting the money your business needs.
The SBA itself does not actually lend money, but it partners with banks and provides a guarantee that the bank will be repaid even if the business fails. This is called an "SBA guarantee."
To be considered, start at a bank. Your present bank may be the best place to start for a loan because they're likely already familiar with your company, but that doesn't mean you shouldn't also check out other banks in your area that may want your business. Any bank will likely ask you to apply for an SBA-backed loan to improve your odds of getting the money you need.
There are several types of SBA loans you can apply for, so consider which is the best fit for your needs and situation:
Once you determine which type of loan to apply for, it's time to start preparing your loan application. An application is much more than a couple of pages filled in with your signature—it's a marketing proposal that explains why you need the money, how you'll use it, and how you know you can pay it back (based on how well the business is doing).
Your loan application should include, at a minimum:
Applying for a loan is time-consuming but the potential payoff can be life-changing for your business. Imagine what your business will be able to do once you have that brand new piece of equipment or can stock up on that key ingredient for your product.
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2013 Federal Reserve Payments Study. https://www.frbservices.org/files/communications/pdf/research/2013_payments_study_summary.pdf
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