SBA 504 Loans for Beginner’s
As you’re just starting your business, you may not be aware of all the resources and opportunities available to you. SBA loans are meant to assist small businesses grow and succeed as part of a community economy-building effort. Here is an overview of how these loans can work for you.
Businesses in developing areas have access to the SBA 504 loan program. This means that if you qualify, you may receive a loan from partnering lenders of the SBA on things like large equipment and real estate as fixed assets for your business. The idea is to make the business process easier to begin for small business owners in designated areas that may need an extra boost to support their local economy. First, you need to make sure you qualify as a small business before you can be further designated as an eligible owner.
If you do qualify as a small business owner, you may receive extra benefits for being designated as a woman, minority, veteran or located in especially distressed areas of your state. If you’re not sure whether or not you qualify, reach out to the SBA, a Certified Development Company (CDC), local organizations and nonprofits that assist in the procurement of these types of loan programs. Take advantage of any available counseling opportunities so you have the clearest picture of what to expect when applying.
Even the strongest business plans have trouble getting started if you don’t have access to the basic necessities of operating. SBA loans are particularly helpful if you need to purchase a facility, land or large equipment for your business. You may even be able to refinance a loan you already have to smooth out the process of growing your business or making significant upgrades.
Once you’ve spoken to a SBA loan officer, determined that you’re qualified to apply for a loan and received counseling from you CDC organization, there are a few steps of preparing your application to work on. Make sure your documents are accurate, clear and completed in full. It’s easy to deny a loan to a business that hasn’t taken the time to correctly apply. Make this step as important as forming your business plan or proposal to increase your chances of obtaining a loan.
Understanding how SBA loans work takes some commitment as you’re beginning your business, but remember there’s always help available if you need it. The loan program was designed to help you and your local economy, so it could be worth the consideration and effort for your business to apply.
