Ask SCORE: How to secure a SBA loan | Business News
QUESTION: I understand it’s easier to obtain a loan from the Small Business Administration than from a commercial bank. What do I need to do to be considered for an SBA loan?
ANSWER: The SBA does not make loans. Rather, if you qualify, it guarantees between 75% and 85% of the loan proceeds, due to default, to banks. You’ll pay an additional 3% to 3½% interest for the guarantee, added to the interest charged by your bank.
Suffice to say, you should first try to secure a direct loan from your bank. Failing that, you should ask if it takes part in SBA guaranteed loan programs.
To be considered, you’ll need to provide a business plan that outlines your company’s goals and how you intend to achieve them. SCORE provides an outline for start-up and established business that can be accessed at https://tinyurl.com/82u4zyzd
Your plan should state the amount of money you want to borrow and how it will be used to grow the business. If…
