Confusion abounds in the small business loan world. You know you
want to start a small business but cannot figure out what kind
of business loan you need. You have it narrowed down to a
small business
loan of course, but even in the small business loan arena
there are a variety of different types of SBA loans. So what
kind of small business loan is right for you? Will a basic 7(a)
fit your needs or do you need the 504 SBA loan? Or does your
situation require a CAIP loan? Maybe a LowDoc SBA Loan is just
what the doctor ordered.
To sort this mess out lets take a look at the various different
kinds of small business loans that are available to you so that
you can decide which business loan will fit your needs.
SBA Microloan - For those in need of less that $25,000 to
start your business then looking at a SBA mircoloan is a good
place to start. These loans are designed to help get businesses
off the ground or to help your business through a short downturn
in profitability. It is also important to note that interest
rates tend to be higher on this type of small business loan.
LowDoc - As you might expect the LowDoc small business
loan requires very little paperwork. In fact, the initial
application for the LowDoc small business loan consists of just
one page. You can apply for a loan up to $100,000. The LowDoc
loan is made on the basis of your character and personal credit
so it can be helpful to those starting small businesses but lack
a business credit history.
Basic 7(a) SBA loan - This type of small business loan
can range up to $750,000 and is backed by the SBA but is
actually issued by commercial lenders. These SBA loans are
normally relatively easily to qualify since they are backed by
the Small Business Administration, a government entity.
504 SBA loan - A 504
SBA loan can be
acquired up to $1 million. However, the loan cannot be used to
finance more than 40 percent of the business venture or project.
This type of
business loan is ideal for individuals who possessing strong
assets and who can show the positive effect (in terms of jobs
created) your business will have on the community.
Community Adjustment and Investment Programs(CAIP) - This
loan program was developed to help small businesses create more
jobs or prevent potential job less. The hitch is that for your
application to be approved you must show that your business is
in jeopardy as a result of trade changes in either Mexico or
Canada.
As you can see there are a variety of different options
available for you business loan needs. It is up to you to do
your homework and determine which small business loan is right
for you. For more business advice and counsel visit
AllBusiness.com
Adam Smith is an informational author for 10X
Marketing. For more information on small business loans please
visit SNCLoans.com
About the author:
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