Planning for a Bright, Financial Future

Do you want to get into business for yourself? There are a variety of ways to get the capital you need, but few of these methods are as advantageous as an SBA (Small Business Administration) loan. With low rates and extended payment terms, they beat out most other forms of funding for cash-strapped entrepreneurs.

How can you make use of these loan types? Here are four times when an SBA loan can be just what you need.

1. Seed money. Seeding your idea — turning it from an idea in your head to a real prototype and testing the market for sales — is hard to get money for. Many entrepreneurs turn to high-interest loans from venture capitalists or even their own credit cards. The SBA was designed to help facilitate the introduction of new businesses into the market. That makes its micro-loans invaluable for people trying to avoid accumulating hard-to-repay loans. Micro-loans are generally less than $50,000, so they're perfect for those with modest opening ideas. 

2. Expansion. Has your idea managed to turn into something actually profitable? Then you must decide where to go next. Expansion is the natural progression of any micro-business, but it comes with the need for new money. You'll need to invest in new equipment, hire employees, expand your market, or develop new products. The SBA offers expansion loans with the same reasonable rates as initial loans. The flagship 7(a) loan program can help you move on without taking on crippling debt. You can get small or large amounts depending on your needs. 

3. New Technology. Every business must keep up with the competition and with customers' needs. The 504 loan program is designed to help you fund new purchases and investment into land, technology, or equipment. It can be the defining factor in establishing a new product line or innovate your existing offerings. 

4. Disasters. Natural and man-made disasters can ruin a business. Therefore, the SBA also plans for this contingency. The disaster loan program can lend you up to $2 million to get your business in recovery and back to making money. This should be one of your first calls if you experience a major disaster, such as a hurricane, earthquake, tornado, or ecological disaster. 

Which of these SBA loans will you need? It's hard to gauge in advance, but the best approach is to become familiar with all of them. Consult with your local SBA loan specialist to learn more.