Entrepreneurs start-up b SBA loan You can look at the following programs sponsored by the US Small Business Administration (and in some cases funded) – SBA microlonies, community benefit loans, 504 loans and 7 (a) loans.

Getting started is a risky bet for lenders – you don’t have a success record yet – and SBA loans are competitive. Targeting the right SBA loan program will improve your chances of success.

SBA 7 (a) and 504 loan programs typically require good personal credit (FICO score 690 or higher), strong business finance, and at least two years of business.

S.B.A. Micro and community benefit loans, in turn, are designed for real startups. Both programs are available for new businesses and are for business owners with bad credit (F21O score of 621 or less) and low income.

Best SBA loans for beginners

SBA microns

Best for: Starting a business

It can be used for the following Work capital, stock, supplies, furniture, appliances, machinery or equipment

Intended for beginners, SBA Microlon program Provides loans up to $ 50,000 to help start or grow your business. The maximum duration is eight years.

The SBA Micronona program is run by a network of community-based lenders, which can set their own rates and eligibility criteria. Although those requirements are lower than other SBA loans, small business owners with low credit or low incomes may be eligible.

SBA Community Benefit Loans

Best for: Starting a business

It can be used for the following Including formal business objectives, stock and working capital

SBA Community Advantage Loans are available for beginners in underprivileged communities. Borrowers are usually in business for less than three years and are not eligible for any other financial assistance. Securities and profits are not reasons for loans for community benefits, making them a great option for new businesses.

You can borrow up to $ 250,000, and loans will mature after 10 years (working capital) or 25 years (fixed assets). SBA Community Benefit Loans are provided by mission-based, community-based lenders.

SBA 7 (a) Loans

how much: Up to $ 5 million

Best for: Growing your business

It can be used for the following Work capital, equipment, supplies and real estate

Of SBA 7 (a) Credit Program It is made up of several types of loans, each with its own terms and conditions. For example, you can borrow up to $ 5 million or up to $ 1 million in regular 7 (a) loans SBA Express Loan.

SBA 7 (a) Loans SBA loans are very popular and competitive. You will usually need at least 690 personal loans or be able to show annual income for several years. Most 7 (a) borrowers have been in business for at least two years.

SBA 504 Loans

how much: Up to $ 5 million

Best for: Growing your business

It can be used for the following Real estate, machinery and other major commercial purchases or improvements

Startups can use one SBA 504 loan “To promote business growth and job creation” to support upgrades for large equipment purchases or equipment. Up to $ 5 million depending on the loan (some projects may be eligible for up to $ 5.5 million).

Small business owners have to keep 10% of the loan (in some cases up to 20%), which is a big obstacle for many startups. Each SBA 504 loan is secured by a certified development company and a bank or credit union.

How to get an SBA loan for starters

1. Calculate initial costs. B. You cannot apply Home Business Loan Until you know how much you need to borrow. Repeated expenses such as licenses, licenses and equipment purchases, as well as recurring expenses such as salary, rent and inventory at least once a year for the first year. This will give you a realistic picture of how much money you need to get your business off the ground.

2. Write a business plan. A strong business plan shows lenders who are thinking of things like your target market, pricing structure, market costs, potential problems and industry competition. Include your initial cost calculation and detailed financial support request, along with projected income. The goal is to show lenders that your business will be successful, especially if you don’t have many years of profit to support.

3. Choose a loan and lender. Decide which SBA startup loan option makes sense for your business, then find a participating lender.

You can use SBA Lender Match A tool to find a bank, credit union or community-based lender who can participate in the loan program of your choice. Remember, SBC supports the loan, but it is the lender who will process your application and eventually call for your loan approval.

4. Prepare and apply for your loan application. Starting SBA The paperwork required to complete your loan application depends on the loan scheme and the lender.

In addition to your business plan and loan application, you will need to provide the following documents

  • Contracts, quotes or purchase agreements.

If your business is already in operation, you will also need to show business finance, including:

  • Balance and income statement.

  • Business licenses and licenses.

  • Current business listing.

The entire loan process, from application to bank account, can take 30 to 90 days, depending on the type of loan.

Frequently Asked Questions

Find and compare small business loans

If an SBA startup loan is not right for your business, or you want to compare loan options, NerdWallet has a list of the best small business loans for business owners. All of our recommendations can help you make the right financial decision based on the lender’s market share and track record and the needs of the business owners as well as rates and other factors.