Running a business requires money to pay the suppliers, employees and cater to the day-to-day operations. However, if you do not have cash at hand, the best thing is to look for appropriate funding. One of the best options you may have is acquiring an SBA loan. Nonetheless, not all enterprises qualify for this type of financing. That is why you should understand the information explained below to know whether your business qualifies or not.
Enough Assets
The value of your business assets is a critical thing that SBA loan lenders consider. Having enough valuable assets makes an enterprise more eligible to qualify for this type of funding. Nonetheless, you should understand that collateral is not the ultimate factor when acquiring this loan. You may not have enough assets, but you can still get the funding if you meet the other requirements.
Profound Cash Flow
The income you get or anticipate from your enterprise, your income are some of the things that a bank or any other lender will consider when approving an SBA loan. The main reason is to confirm that you can make the monthly payments without fail. The lender will focus more on your outside income sources if you want to fund a startup. That is why most lenders are more willing to finance enterprises that have been operational for at least two years.
Credit Rating
Like with most financing, lenders will consider your credit score before approving your application for SBA lending. If you want to increase your eligibility for this loan, you must ensure that you have a good credit score, which, in most cases, should not be below 620.
Enough Capital
Banks and alternative lenders offering SBA loans will be interested in how much capital you have at hand. That is because the SBA loan you get does not cover 100% of your business expenses. The amount you will be required to put down is also known as an ‘equity injection,’ and it varies depending on your business and the type of SBA lending you need.
Different lenders in the market have varying requirements, but the above explained are the key factors they consider. Feel free to contact Signal Peak today to get your business off the ground and running.