While there are many sources of commercial loans in booming economies, like that of Texas, many small business owners often turn to the Small Business Administration (SBA) for their lending needs. Even though many small business owners find lots of helps with the SBA, there is a lot to the process.
Dealing with the Small Business Administration is like dealing with any other government bureaucracy. The benefits might be very good for you, but wading through the endless amounts of red tape and paperwork can be discouraging to even the most stalwart of pursuers.
But why should a business owner pursue a commercial loan from the Small Business Administration anyway? Why is the SBA different than any other lender? There are actually a number of benefits that an SBA loan has over traditional lenders,
One of these benefits is that the cost of obtaining such a loan is usually lower than it would be by pursuing a similar loan through a bank or other traditional lender. This means that the borrower will have to put forward a smaller down payment (and some SBA loans actually include, or have provisions to include, the entire cost of the loan).
Another benefit that is incredibly appealing to many small businesses is that there are often lowered requirements in order to secure a loan. While many traditional lenders require sources of collateral or an excellent credit history in order to secure a commercial loan, the SBA, for the most part, does not require a borrower to have any collateral. In fact, the SBA often grants businesses loans based on cash flow, rather than credit history. This makes it an excellent source of funding for those business owners who have taken some financial hits in the past. If decent cash flow can be demonstrated, it is most likely that the SBA will be able to work with you to find funding.
Term lengths and interest rates are another appeal of the SBA to small business owners. The repayment terms are usually much longer than that of traditional lenders, with many commercial loans having a term of up to 25 years. That is a tremendously long period of time to pay a loan back in the world of commercial lending. In addition to a more agreeable timetable, the interest rates of loans from the SBA also has the potential (this is not always the case) to be lower than traditional sources and significantly lower than hard money loans. Longer terms and lower rates mean that small businesses can focus on growth, rather than debt.
How can I use the benefits to my advantage if I am looking for a commercial loan to expand my business in Texas?
If you are in a position where your small business needs access to capital, but you are either just starting out or have had some credit problems in the past, the Small Business Administration might be an excellent source of help with a commercial loan to help you achieve your business goals. This could even help you to take advantage of a great business opportunity with a commercial loan in Texas.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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