The Small Business Administration enjoys massive support from a ton of politicians, and they deserve it because SBA focuses on rescuing small businesses.
If you don’t believe it, then run a quick Google search. You’ll find a bit of complaint, but trust me, you will also come across a ton of justifiable client reviews.
Sadly, SBA is not getting credit for all their good deeds. Instead, there are a lot of hearsays being spread by those who are not getting business funding possibilities.
But to help you identify between the reality and the rumor mills, check out these three SBA myths below:
1. SBA Lends Money
While it is true that Small Business Administration might come in and lend money in times of disasters, you should know that it’s not their primary role. Instead, SBA acts as the government’s guarantee program for both banks, as well as the nonbanks.
In other words, SBA gives a backup to loaners who don’t want to risk issuing loans to startups or unproven businesses seeking loans. Additionally, SBA offers an eighty-five per cent guarantee for loans that can sum up to $150,000, as well as a seventy-five per cent for any loans that are way past that.
2. SBA is Strictly For Mom-and-Pop Shops
Even though SBA is looking forward to helping businesses such as Mom-and-pop shops, the Small Business Administration is also open to supporting even larger enterprises.
Though SBA’s 7(a) flagship program, you can secure SBA-backed loans of up to $5 million if you need working capital for your business.
The best of all is that SBA, though its 504(n) program, can offer you up to $12.8 million, if you intend to purchase real estate or even larger equipment that costs an arm and a leg.
3. I’m Out Because the Banker Told Me I Don’t Qualify
Please don’t fret and get off your head the notion of “I’m out.”
Sure, there are close to 2,200 banks and nonbanks in the US, and the good news is that they offer SBA-backed loans.
Each of these banks and nonbanks has implemented the program differently, which means that they will have different requirements.
That said, you can still secure a business loan even if other lenders have rejected your application. The point is to keep trying different lenders.
Usually, there are lots of hearsays, and paying attention to them could be another halt to your excellent plans. Always be sure before you throw in the towel.
Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their business funding solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favourite job is the one he’s now doing full time — providing business funding for hard-working business owners across the country.