We all love independence and owning your own business is one way of ensuring that. The problem arises when it comes to find someone to fund your business. There is a limit to borrowing from friends and family. There comes a time that we feel ashamed. Today owning a business is not as difficult as it was some years back. Now, with several small to large scale institutions willing to lend a helping hand, owning a business has never been easier. However; most of us live on tight budgets and even though getting funded may not be a problem, often repayment of loan becomes one. Interest rates are high and initial return on investment is not so high. The imbalance creates a paralyzed zone, where you are stuck in between funds and a slow start.
This is where a proper understanding of the financing process is essential to get maximum benefit of funds that you borrow from a financial institution. Majority of small businesses are not able to meet the criteria laid out by major financial lenders and hence disqualify or end up paying higher interest rates. With a boom in online businesses, there is also the option for looking for lenders other than from banks. Online lenders are collaborating directly with small businesses with easier terms and conditions and faster lending. However; they carry their own risks.
Small Business Association
Small business association works in tandem with popular banks, and other lenders and is backed by the government to guarantee loans for small businesses which may otherwise not receive funding.
How SBA can help you get started
1. SBA has loan programs for funding a wide range of businesses.
2. The SBA lays down terms and conditions on behalf of its lending partner like banks, financial houses, and others such institutions, so that you are answerable to SBA and not to the prime lender.
3. The terms and conditions put forth by Small Business Association is much more borrower friendly than if taken directly from the bank or institution.
4. The SBA takes upon itself to ensure repayment of loan.
5. You can choose which loan program suits you best by way of terms and conditions set forth regarding use of money and repayment.
6. The process of obtaining loan via SBA may take longer and involve more paperwork, but you can be assured of getting the loan you need, which may have been declined by the bank if approached directly.