SBA loans offer excellent terms and conditions, making them attractive to small business owners, but not every business will qualify. It can be difficult to get approved. Here are five reasons that could railroad your SBA loan chances and what to do.
You don’t qualify because you’re a startup
If your business is less than two years old, it can be difficult to qualify for an SBA loan. You can look for lenders that will loan to startups or borrow based on your cash flow.
You have a low credit score that prevents qualification
SBA loans require a strong credit score. The solution is to find a lender that only requires decent credit or who doesn’t check credit.
Your business doesn’t qualify because it doesn’t have enough collateral
The solution is to find a short-term lender that doesn’t require a huge amount of collateral for a loan. SBA loans are quite strict in their requirements, but there are many lenders who provide financing without requiring collateral.
You don’t want an SBA loan because you don’t want to be personally liable
With an SBA loan, the you have to personally guarantee that it will be paid back. Your personal assets, like your home or car, may be sold off if the loan goes into foreclosure. Look for a lender that doesn’t require a personal guarantee.
Your business won’t qualify for an SBA loan because your industry is excluded
The SBA won’t guarantee loans for life insurance companies, lobbying organizations, some franchises and other types of businesses. You may have to find an alternative lender that will offer financing for your industry.
GrowthCC understands that your business may not make the cut when it comes to SBA loans, but that shouldn’t keep you from having financing opportunities. Contact us today for more information.