Those who are looking to take advantage of the latest incentives and potential perks of owning a successful business may want to take a closer look at what it takes to set the wheels in motion. Business loans via the SBA are often approved by following a step-by-step process and meeting a simple set of requisites.
Depending on the type of financing in question, SBA loan requirements will vary. The most commonly sought-after loan is the CDC/SBA 504, which can be used for a variety of acquisitions. In order to qualify for reduced SBA loan rates, prospective borrowers must provide a few different pieces of financial documentation dating over the previous three years.
Your FICO Score May Help When Applying For Various Business Loans
Having a good credit score is a definite plus when applying for these types of business loans; submitting personal and business banking records is mandatory, as well as income tax records spanning the same period of time. Most every loan company will ask for the same information, yet qualifying for affordable commercial mortgage rates may not be as easy.
Other SBA loan requirements include having a solid business plan in place while being able to prove its potential value and sustainability: projected profits coupled with outgoing expenses, targeted customer base(s), expected turnaround times and scouted demographics can help to secure the loan. SBA loan rates will also hinge upon how much is initially put towards the principal. Business loans containing lower commercial mortgage rates are often granted via higher down payment amounts.
Once the commercial lending process has been finalized, funds from the CDC/504 can be used for purchasing existing business property or the development of brand new construction. Upgrades and/or conversions can be implemented through the purchase and use of necessary equipment and machinery, which are automatically covered under the CDC/504. Newly constructed or remodeled buildings can enhance overall appearances designed to attract new clientele and increase sales.
Other Types Of Commercial Business Loans To Consider...
Although the CDC/504 is one in a handful of SBA business loans, many proprietors have been able to succeed and expand operations by using this type of financing.
Building some solid equity along the way is usually when company owners decide to expand their businesses via refinancing, which is when the scope of the loan can change for the better. Commercial mortgage rates and monthly installments will likely be reduced dramatically, thus giving CEOs a number of lucrative choices. Expansion can include investing in new locations or adding some much-need space to an existing facility. With reduced rate SBA business loans and debt consolidation adding up to a bundle, mitigated expenses can result in surplus funding for unrelated projects and/or investments on the side.
No matter the set of circumstances, the benefits of choosing the right loan company can help potential borrowers get where they fiscally need to be. While SBA loan rates may be some of the lowest in town, it’s always a good idea to do some extra research regarding commercial mortgage rates in general and see how they stack up against the rest.
Chances are, the SBA has a little more to offer, which includes a variety of loan packages to suit most every commercially based situation. Small business loans such as these are keeping the backbone of commercial lending intact.
