The early 1950s would begin the government agency to operate with the name the Small Business Administration; however, it was under the presidency of Herbert Hoover that the agency would begin under the name of Reconstruction Finance Corporation in 1932. There have been many well- known brands to utilize a loan from the Small Business Administration. In 2017, the government agency approved over 65,000 loans that totaled over $30 billion. The Small Business Administration provides a variety of ways for a small business to receive financing for their business. There are several requirements a small business must meet to qualify for a loan from the Small Business Administration. There are plenty of reasons an entrepreneur would take advantage of the benefits of obtaining a loan from the Small Business Administration.
Advantages of Utilizing Finance Options Of The Small Business Administration
Things like sba loans miami fl were created to help small businesses succeed and provide an advantage such as the low-interest rates for loans. Interest rates are normally very low, but the small business must have exceptional creditworthiness to qualify for the loans with the low-interest rates. Small business who qualify for a loan offered by the Small Business Administration will be able to take advantage of the good loan terms and repayment schedule. The repayment schedule can vary based on what the loan is for. For example, a loan used for equipment will have a repayment schedule of paying monthly payments for 10 years. The other benefits an entrepreneur would look forward to being:
• The flexibility of how a loan can be used
• Make Resources Accessible
• Can borrow a lot of capital
There are certain types of loans offered by the Small Business Administration that can be used for almost anything. A small business owner should be aware not all loan types from the government agency will be as flexible as the loan called the 7(a) loan. The 7(a) loan can be used for almost anything such as buying inventory. By obtaining a loan from the government agency, the agency provides access to resources that will be able to help small businesses. A small business may be able to find much-needed training via the network of resources provided by the Small Business Administration. With some loans offered by the government agency, a small business can receive up to $5 million. Banks who works with the Small Business Administration are more willing to take on risk for a company who have been approved for a loan by the government agency, and they are not fearful of loaning the small business a substantial amount of capital.
Types of Loans Offered By The Small Business Administration
A business looking for a significant amount of money would apply for the 7(a) loan. The loan amount can reach over $5 million with interest rates between 7 to 10 percent. It is more commonly used loan type of government agency. The microloan provides entrepreneur access to capital of $50,000. Disaster Loans are offered by the Small Business Administration for small businesses who have been impacted by natural disasters. The Small Business Administration will offer a loan called the CDC/Small Business Administration 504 loan. It can be used to purchase commercial real estate. The small business would have to occupy the commercial property when purchased.