Posted on: 15 November 2019Share
You have all the faith in the world in your small business -- but you also know that your enterprise will need some extra help growing to meet your long-term goals and ambitions. A commercial loan would seem like the way to go, with a small business loan from the SBA as one clear option on the table. But how can you determine whether this type of loan makes the most sense for your needs? Here are three scenarios which naturally lend themselves (so to speak) to SBA loans.
1. You're Not Satisfied With Your Peer-to-Peer Loan Options
P2P (peer-to-peer) loans hold some appeal for certain business owners who just need to obtain a small commercial loan quickly and easily. These loans can be processed entirely online in a matter of minutes, offering fixed rates and straightforward fees. Unfortunately, this kind of loan may actually prove limiting for your needs. For instance, you'll have to contend with a repayment schedule that may be as short as 3 years. The amounts of these kinds of loan also tend to top out at $35,000. Unless you're really in a hurry and don't want to deal with banks at all, you'd be better off looking at other small business loan services.
2. You Can't Get a Standard Business Loan
Standard commercial business loans are the most versatile kinds of loans, at least in terms of loan structures and repayment schedules. These secured loans help many businesses fund major projects and initiatives. Unfortunately, a standard business loan often isn't a good fit for a small business. If you don't have some serious equity or other assets on hand, for example, you may have trouble obtaining a secured loan of sufficient size. A younger business will also have more trouble getting a standard commercial loan than a more well-established one. If there's a good chance of your being turned down for this type of loan, you should look at the options provided by small business financing services.
3. You Want the Longest Possible Repayment Schedule
Small business loans such as SBA loans specifically address the needs and concerns of smaller enterprises looking to grow. Unlike other types of loans, SBA loans are actually backed by the U.S. Small Business Administration. The government's willingness to cover up to 90 percent of bank losses allows banks to issue such loans more freely and flexibly than standard business loans. Better yet, these small business loans give you an exceptionally generous repayment window (20 years, in some cases). If you want to breathe easier about repaying your loan, this flexibility represents a huge plus.
Now that you know a little more about what each category of business loan can and can't do for you, it's time to look more deeply into your options, including the option of an SBA loan. Talk to your local provider of small business financing services about your easiest path toward business success!