SBA Financing

In this discussion, we are going to turn our focus on SBA financing and how it relates to your developing and expanding business operations. As financing typically comes in a number of different forms and a number of different programs that are involved that are available from the Small Business Administration in order for you to properly finance the  your start up business, expanding business, or for business that you intend to acquire. Specifically with in this article we are going to focus on all three facets of SBA financing as it relates to your ongoing business activities especially as relates to raising capital.


First, let's discuss SBA financing as it relates to the development of new businesses. In so far in regards to our previous articles we have discussed some of the more popular programs that are related to Small Business Administration programs including the SBA 7a program, the SBA 504 program, as well as ancillary programs that are have been specifically developed in order to quickly provide entrepreneurs with the financing they need in order to develop their business operations. Of course, you'll need to have a very well developed business plan as it relates specifically to obtain startup business financing through the Small Business Administration. This is one of the ongoing focuses that we will continue to discuss as it relates to receiving any SBA guarantee so that you can receive bank financing very quickly from a number of different lenders have found that your new business venture is economically viable. WE continue to discuss this matter through this article, as well as several additional articles, as it pertains to the startup of your new business venture. The first step that you need to take when appropriately obtaining SBA financing, is to focus on your personal financial assets and how they can be used by a bank when determining as to whether or not you are worthy credit risk as a relates to the business loan obligation that you are looking to undertake. As a startup business, you absolutely need to personally guarantee that the financing that you are seeking to receive workers to acquire the SBA loan funds that you're seeking. On a quick side note, it should be noted that the Small Business Administration does not act as a direct lender for the loan that you need, but rather as a guarantor of such financing. We encourage you to review several of our articles that pertain to this specific issue that can be found through If you are uncertain to the requirements for obtaining SBA financing as it relates to starting a new business then you will need to work very closely with your banker in order to determine whether or not you are qualified for a small business administration loan. There requirements as it pertains to small business administration loans are very simple. Primarily, you must be a US citizen as well as the fact that he must intend to develop a business that is not based out of your home. That means the general requirements are relatively small, but you need to be sure that you fall within the direct requirements as set forth by the Small Business Administration as it pertains to developing a new business with the capital you are seeking through a small business administration program. Of course, prior to engaging in type of small business lender for SBA financing, strongly recommend you speak with a certified public accountant so that you can clearly understand the rules and regulations of all with this specific type of funding source as a relates to developing new business. The best businesses are suited for SBA financing, as it pertains to business startups, are those that are looking to develop a highly economically viable business as a professional practice or if you are seeking to acquire an existing business. Later in this article, we'll continue to focus on the issues as it pertains to using a small business administration loan regarding your business expansion and acquisition needs. However, in the specific paragraph we will continue with a focus on using SBA financing in order to effectively provide you with the financing that you need in order to start up your business. Foremost, when developing your business plan for SBA financing can have a clear focus on the job creation that you provide through the SBA guarantee that you'll receive in regards to the funding that you need. As we discussed before, one of the key points of receiving a small business administration backed credit facility that you are not only looking to develop a new business so provide you with income and wealth but also to create jobs for the economy at late. Time and time again, we have found the best candidates for SBA financing focus on the job creation that will allow them provide financing to you through your ongoing development of your business. When you're seeking SBA financing for a startup business, it is imperative that you very clearly showcase a number of jobs that are to be created through type of funding that you're seeking. In future discussions will focus on the specific programs that are tailored to you so that you are able to effectively receive the financing need while also showcasing to the small business administration that you are seeking to create jobs new entrepreneurial venture that you're developing.


In this part of our article, where discuss the usage of SBA financing as it relates to expanding your business. There are a myriad of laws and regulations that have been put in place by Congress and the small business administration has it relates to the definition of what consists of being a small business. As such, we strongly recommended that you review the use terms of SBA financing so you can ensure that you qualify for a small business administration loan so that you can effectively expanded business with the capital that you are seeking. In many instances, if you are an existing business then you may be able to qualify for a small business administration loan so that you can effectively develop new retail locations, acquire new inventory, and working capital that will provide you with the tools that you need to expand your company over a three year to five year time frame. If you are seeking expansion capital, via SBA financing, then is extremely important and yet that you have been in business for at least three years so you can effectively showcase to the financial institution that you are providing your business plan to that you have put a plan that showcases exactly how you intend to grow the business in the next 3 to 5 years. Additionally, you also need to submit at least three years worth of tax returns and has related to the operations of your small business in the past. It goes without saying, that in today's credit environment, that showcasing new operations and your growth potential are imperative to securing SBA financing and related capital. If you are able to do so, you will become a much more effective candidate as it relates to obtaining SBA financing. A certified public accountant can assist you with putting together a business plan and a financial model that not only showcases your previous success in business, but also showcases what you intend to do with the funds and how your business will use the intend capital. For many entrepreneurs, SBA financing is the primary methodology that is used within the capital is needed in order capitalized on business activities that are economically viable. Again, and it pertains to our much broader discussion above as it relates to the development of new businesses, many people had a very clear and decisive business plan that showcases not only how you intend use of funds but also how these funds will be collateralized as relates to your ongoing business operations. This is especially true during expanding business that is looking to acquire new pieces of equipment, working capital, or financing from other tangible assets that would allow you to effectively expand the next 3 to 5 years. As we have discussed before, it’s extremely important for you not only to develop a business plan that showcases the anticipated financial results that you receive the financing need, but is also extremely important that he develop a collateral plan that showcases the potential assets that will secure the SBA financing that you're seeking. In the mind of the bankers that are going to reviewing your SBA financing and loan application, you will need to provide them with a much greater insight as to how they can sure that they will receive the ongoing interest payments and principal payments can be acquired through the SBA financing that you receive. Prior to obtaining SBA financing for your expanding business, you should have all the appropriate documentation prepared so that you're able to effectively and quickly provide the financial institution that you're working with all the documents that they will need to render any lending decision. This is especially true if you are seeking SBA financing as the small business administration will require substantially similar documentation as it pertains to providing you financing with your business. Again, your certified public accountant should be able to work very closely with you in providing the personal financial statements as well as the business financial statements as it relates to the necessary documentation in order to secure your SBA financing. In this regard, you'll need to not only provide three years worth of personal tax returns in order to secure the capital you need, but you also need to provide the previous three years of financial statements not only in tax return form, but also through profit and loss statements, cash flow analysis statements, and balance sheet statements that banks review as they decide to render a lending does the session as it pertains to the SBA financing that you're seeking. By working with a certified public accountant or SBA Brokers you’ll be in an excellent position to entertain the banker that is reviewing the SBA financing that you need in order to develop and further grow your business. Time and time again, this will be one of the running themes that we discuss throughout our articles as it pertains to business loan funding as well as SBA financing.


Finally, we will discuss using SBA financing as it relates to the acquisition of a business that is already in operation and is producing a positive cash flow as well's profit. Most commonly, these entrepreneurs that are seeking to acquire business use the SBA 7a loan program so that they are able to receive the financing they need in order to purchase an existing business. Of course, as we discussed before, you'll ultimately need to put up 10% to 20% of the total face value of the transaction so that you're able to secure the SBA financing immediate as it pertains to business acquisitions. This, of course, is primarily due to the fact that financial institutions want to see that you are taking a risk is well and are not seeking 100% financing as it pertains to your new business acquisition. However, on a side note, there are certain circumstances in which you may be able to receive 100% financing as it relates to you or business loan acquisitions. However, given today's economic climate, these programs have become limited only to highly established businesses that are able to effectively capitalize on existing collateral in regards to receiving five financing for the business that they intend to purchase. Again, most of us as it pertains to business acquisitions, use the 7a SBA loan program that is available through the small business administration. Most entrepreneurs that are seeking to acquire existing businesses; it is the 7a SBA loan that is used because certain assets can be financed on a staggered basis. As our previous article discussing SBA financing, many of the small business administration loans are available to you can provide you with a staggered form of financing in regards to specific assets at your purchasing. For instance, if you are acquiring a business that has real estate then the portion of the loan that you are seeking can be viewed as an a real estate purchase rather than a business acquisition purchase. In these specific instances, you will receive a longer term and a lower interest rate for certain aspects of the loan as you seek SBA financing. When you are structuring SBA financing with a bank that is willing to do business with you in regards your business acquisition, you should make sure they are to effectively been break the loan down into several different pieces so that you can receive the best interest rate possible and the best terms possible as you progress through your business acquisition activities. This is going to be one of the things that we continue to focus upon as we discuss conventional business loans, SBA financing, and other types of financing as it relates to business acquisitions. Additionally, SBA financing is a great way of obtaining the capital that you need in order to acquire business primarily due to the fact that the risks that are associated with acquiring an existing business are substantially lower than that of developing a new entrepreneurial venture. Time and time again, we will continue to discuss the benefits of potentially purchasing an existing business that is for sale rather than starting a business that is going to be started from scratch.


In conclusion, the usage of SBA financing for your developing business, expanding business, business acquisition needs is a tremendous way for you to effectively obtain the financing that you're seeking so that you can complete the transactions that required in order for you to get your entrepreneurial ventures also ground or expand them for a significant time frame. Throughout some of our future discussions, we will continue to focus on the issues as it pertains to acquiring SBA financing so you can effectively present to your bank or any business plan as well as a collateral plan that clearly showcases how you intend to use the funds that you receive one currently showcasing the fact that the business venture that you're looking to enter is economically viable. In several of future discussions, as well, will discuss the specific programs are available to you through the small business administration as it pertains to these specific capital raising operations. Thanks again pertaining to and look forward to continuing to provide you with a tremendous amount of information as it relates to the ongoing capital needs for your business.