Small Business Administration (SBA) Loans
for Women
Small Business Administration (SBA) Loans
for Women
There are a number of options available
to women for obtaining small business loans. One of the most well-known
types of business loans available for women is through the Small Business
Administration (SBA).
The Small Business Administration does
not lend money directly to women, corporations, partnerships, or other
individuals, but rather, Small Business Administration loans for women
can simply guarantee loans that have been submitted by financial institutions.
In other words, a woman interested in a business loan can be obtain a loan
easier if the loan is approved and guaranteed by the Small Business Administration.
Small Business Administration Loans for women are applied for just as with
a regular small business loan, namely, through a commercial bank, or another
local, regional, or national bank.
Guaranteed approval for Small Business
Administration loans for women offers women the opportunity to obtain monies
without the hassle or stress involved with wondering whether or not the
loan will be approved. To come to a decision on a loan request with the
Small Business Administration, the SBA evaluates a business or potential
business idea much the same as any other lender. Small Business Administration
loans for women, however, guarantee a financial institution that the loan
will indeed be paid. The SBA is of huge assistance to small businesses
owned by women, especially if a financial institution will not approve
a business loan. Reasons that a financial institution may not approve a
loan may including the following:
- The borrower has insufficient collateral.
- The particular area of business or industry
is a high risk to the financial institution.
- The business is older and requires much
updating to succeed.
In these instances, Small
Business Administration loans for women can come into play, and can
assist a woman in obtaining a loan for business purposes. With guaranteed
Small Business Administration loans for women, the SBA is guaranteeing
the financial institution, or the lender, that 80 percent of a loan value
up to $100,000 will be paid back in the event of default, and 75 percent
will be paid to the lender on loans over $100,000 that default, with a
maximum loan value guarantee of $750,000.
Small Business Administration loans for
women offer lenders the security and guarantee that a business loan will
be paid back to the financial institution lending the money if the money
is not paid back by the borrower. Small Business Administration loans for
women are, therefore, a hugely powerful lending tool for women in business,
including those women just entering the business world by starting a new
business, as well as women purchasing an existing business, or purchasing
new equipment or supplies in an existing business that they currently own
but would like to expand upon in one or more ways. Women who may not otherwise
qualify for a business loan through a bank or other financial institution
can turn to Small Business Administration loans for women for assistance.
It is important to keep in mind that Small
Business Administration loans for women are not necessarily inexpensive
loans. Interest rates tend to be at, or above, typical interest rates for
commercial loans offered by other financial institutions and banks. In
addition to this, there is a guaranty fee, typically 3 percent to 3.875
percent, based on the dollar amount of the guaranteed portion of the loan.
Small Business Administration loans for women also offer a longer amortization
rate than most commercial loans offered through banks and financial institutions.
Working capital loans can be financed for up to seven years. Fixed asset
loans can be financed for up to ten years, and real estate or construction
of a building for business can be financed for up to 25 years.
Before applying for Small Business Administration
loans for women, it's crucial that all "homework" is done. Check your
credit scores. If there are marks on your credit report, work to resolve
them. Prepare to explain anything that cannot be cleared up, and be honest.
Create have a written summary of your business, as well as a summary listing
everything that will be purchased should the loan be approved. If the business
is already in existence, be prepared to show reports, bank statements,
and receipts to verify that the loan payments can be made each month.
For more information on what the Small
Business Administration offers in your area, visit http://www.sba.gov/regions/states.html,
and click on the state in which you reside or will operate your business.
Information available includes financing information, disaster relief information,
counseling and training resource, opportunities, a start-up kit, local
resources, and other extremely valuable tools for business.
For more information on the Small Business
Administration and Small Business Administration loans for women, visit
http://www.onlinewbc.gov. |
