When it comes to getting a small business loan it’s obvious that lenders are looking at why the business hopes to acquire financing, how much money they are looking to borrow, and how they plan to use this money so that they will not only grow and prosper their business but will be able to pay back their debt obligation. However, we have continued to see conflicting accounts of small business borrowing opportunities even here in September, despite the fact that there have been programs implemented to promote small business lending and reports that some lenders are loosening their standards when it comes to allowing certain businesses to access credit.
Yet, some officials are prompting small companies to look at whether they could benefit from a traditional small business loan or a microloan, as there are some borrowers who may find that opportunities from microloans may not only fit their financial needs better but they could possibly find these types of borrowing options easier to come by. While it should be understood that no business is guaranteed a loan, no matter if they are in a decent financial position or not, some companies are taking advantage of programs that can offer either traditional or microloan funds like those available from the Small Business Administration.
SBA loans are not the only type of financing that a business owner may be able to acquire but many banks are more willing to work with companies that they may have otherwise been hesitant to lend to if loans are guaranteed by the SBA. Also, some businesses have been able to not only get funding from traditional business loans but in cases where a substantial amount of financing may not be needed, SBA microloans can also be helpful and they offer technical training that may help a borrower better use the money they receive to their advantage when it comes to growing their company.
Yet, deciding on what type of loan will be best for company is obviously going to take a great deal of homework by the borrower, as businesses may indeed benefit from either a small amount of funding, which is available through a microloan, or some companies may need the funding that will come only through a more traditional loan, and knowing what type of financing a business needs is going to better help these borrowers prepare when it comes to approaching a lender.
Obviously, microloans have traditionally been used for smaller purchases, like inventory, office equipment, and for purchasing supplies but some businesses may be looking to get financing to purchase property, for advertising, or for purposes that may have costs which would exceed these microloans, and this is where businesses must realize what they plan to use their loan for, write a proposal that will show lenders how they plan to use this money, and ultimately this could better help a business understand how any funding they receive may be better implemented as they review their borrowing options.
There have been reports that state SBA lending is still an option for businesses that have potentially had trouble when it comes to dealing with major banks, but it should also be remembered that some businesses are seeing success when it comes to either simply using microloan funding, rather than borrowing a large sum that they may not need, or talking to credit unions and smaller financial institutions in their area, as these banks may have lending programs in place that are looking to help build up businesses in a local community or region.