How Small Business Loans Can Launch Your Business Dreams

Written By Mary Beth Eastman
Last updated March 23, 2018

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Person counting money to symbolize getting a loan
March 23, 2018

Simple. Thrifty. Living.

You can realize your business dreams. Creating your own company requires vision, planning, hard work and a financial start. Most people need assistance in getting their dream financed unless they have significant financial assets of their own. Banks may not be anxious to give you a regular loan unless you can demonstrate a stellar credit and financial history. An SBA-backed loan still requires a solid history, but it may be more lenient and allow you to get a larger loan.That’s why you should investigate getting a small business loan through the government program.

A small business loan doesn’t come straight from the government. Instead, your local bank or credit union works with the SBA, Small Business Administration, to get you the funding you need. Your loan is backed by the government, so the bank isn’t on the hook if you are unable to repay it for some reason. As a bonus, the interest rate for these loans is often less than what you’d be charged for a regular loan.

These loans can be used for nearly every aspect of your business, including commercial mortgages, equipment, supplies and refinancing existing debt. The best small business loans, like OnDeck or Kabbage, can give you a great APR or flexible terms to meet your cash flow needs.

Be prepared to fill out your share of paperwork when applying for these loans. You will need to provide personal background information, a resume and a business plan. In addition, you will need to explain how you plan to use the loan. You may want funds to start a business or to improve your current one. Both your personal and business credit scores are important. If your credit is bad, your chance of being successful is, of course, greatly reduced. You will need to submit tax returns and a variety of financial documents. Online loan sites may take other factors into account, helping you to get the loan you need. The process may seem lengthy, but the rewards can be great.

These government loans vary, so you’ll need to research to see which one best fits your requirements. They include:

  • 504 Fixed Asset Program
  • Disaster Advance
  • 7 (a) Loan Guarantee Program
  • MicroLoan Program

Your financial professional can advise you on the best type to pursue.

These small business loans offer you the help you need to launch your business or improve your current one. Because they are guaranteed by the government, you may receive more favorable terms than you would through a regular business loan.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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