SBA Loans for Startups: 5 Funding Options and Requirements - YouTube

Do you have a startup but need funding?

Or maybe you have a great business idea, but you need to finance it...

If you find yourself there, then you better stick around for today's loan guidance!

Today, we're talking about SBA loans for startups. With these types of loans,

you'll have access to the financing that you need without high-interest rates or unfavorable terms.

So let's uncover this together!

But before we do, subscribe to our channel if you're new to us. And if you're already part of our community, welcome back!

First, how can the SBA help your startup?

The Small Business Administration was created to provide small business owners, just like you, with the resources

they need to operate their own business successfully.

The SBA helps small businesses, including startups and, offers loan programs whether for hiring new employees,

acquiring a business or a franchise, or even for equipment purchases.

The funding isn't directly through the SBA.

They have established several loan programs through middlemen. Think of banks, private lenders and even non-profit organizations.

SBA loans are designed to help small businesses grow and/or stay above water.

That's why they have a set of standards that keep interest rates low and terms flexible.

Now, you'll find five types of SBA funding for startups:

Microloans, Standard 7(a) loans, SBA Community Advantage loans, SBA express loans and, SBA CDC/504

loans. A microloan is the first resource for startups that needs smaller loans. These types of loans can be used to purchase materials,

furniture, supplies, inventory and even working capital. However funds cannot be used to purchase real estate

or to pay off, or

refinance existing debts. This SBA microloan program is a great choice

if you're a startup that needs working capital and/or need to purchase items that will help you expand the business

or to get your project off the ground. The SBA 7(a) program is the most popular choice for most startups and small businesses

because of the flexibility it offers. Startups can receive up to 5 million dollars in funding through the 7(a) loan program.

These loans can be used for equipment or inventory, the purchase of property, refinancing debts,

renovations or other purposes.

The long repayment terms, low-interest rates, and overall flexibility make this a top choice for many startups and small businesses.

That said 7(a) loans can take a while to be processed and funded.

So, if you're in need of fast cash,

This may be a drawback.

The SBA Community Advantage Program offers very similar rates and terms to the traditional 7(a)

Program with just a few minor differences. For example, the maximum amount that can be borrowed: borrowers can receive up to $250.000.

This program is great

If you're a startup that doesn't meet the eligibility criteria for the standard sba 7(a) loan.

The SBA Express loan program offers benefits including low interest rates and long repayment terms.

However,

there are two main differences between the 7(a) and the Express programs: the maximum loan amount and the approval turnaround.

If you apply for an SBA express loan, an approval decision is

guaranteed within 36 hours after your application is submitted.

Even though it can take time to complete the process and to receive the funds,

getting an approval quickly means you no longer have to shop around, and

you can rest assured that the money you need will soon be on the way.

Now, if it sounds like it's the right type of loan for your startup, click the link in the description below

to learn more about SBA Express Loans. The SBA CDC/504 Loan program is designed for small business owners

who want to make a fixed asset purchase to expand or update their business. This loan provides funding

for the purchase or upgrade of commercial space, or land, the purchase of long-term equipment, or

refinancing debt related to the upgrading or expansion of the business.

This program is a good choice if you're a startup looking to expand or improve your commercial space.

If you're a business owner seeking capital or funds to use for other purposes,

you would be better off applying for other SBA loans. Also, note here that this process can be time-consuming!

Now, who can qualify for a startup SBA loan?

If you're a restaurant startup a tech company or any other business and have been in business for two years or less,

and meet the requirements of the SBA, then you're eligible.

Here, be aware that these loans have such favorable rates and terms that they can be difficult to obtain.

Here are the few basic requirements across the board: Qualified businesses must: be for-profit operations;

You must do business in the united states;

You must have an adequate amount of owner equity;

SBA loans should be also pursued after all other means of funding have been exhausted;

Your business must also demonstrate a reasonable need for requesting the loan. If your business invests in real estates,

engages in illegal operations, operates as a non-profit, or specializes in loaning money, well...

You are disqualified from applying for these programs! Another potential requirement of receiving an SBA startup loan is collateral.

And if you are startup, then you are seen as a riskier investment by

lenders. So it's very common to have to put collateral in order to receive funding. The ONE exception to the rule is.........

[drum roll]

explained in our full detailed article linked below! Check it out!

Also,

if you wonder how you can get an SBA loan for a startup, come back next week for a dedicated Maverick Minute on that matter!

And if you can't wait, check out our website at merchantmaverick.com

See you next week!

Check out our other videos on SBA loans or

any other videos on our small business loans playlist!