About SBA loans

On Behalf of | Oct 16, 2018 | Business Law |

Entrepreneurs in Fort Walton Beach may find that getting loans guaranteed by the United States Small Business Administration is a compelling financing option. An SBA loan may be the logical choice small businesses that require funding. It has competitive terms and rates, guardrails for completing the loan process, longer times for repayment and smaller down payments. However, it is important that small business owners who are considering applying for an SBA loan conduct the necessary research to understand exactly how the loans work.

Despite the name of the loan, small businesses do not receive the loan money directly from the SBA. They are required to apply for the loans through approved financial lenders. The role of the SBA is to act as guarantor of the loan and to establish guidelines in order to assist entrepreneur with obtaining loan approvals and to lower the risk for lenders.

In order to be eligible to apply for an SBA loan, the enterprise in question has to be a for-profit business that is operating in the United States or in its territories. The owner of the business also has to have placed equity into the business. Almost any small business that meet these criteria and provides a service or product can apply for an SBA loan.

The amounts of SBA loans can be as little as $500 or as much as $5.5 million. The funds can be used for almost any type of business purpose, including purchasing equipment or real estate and funding ownership transitions.

An attorney who practices business law may assist entrepreneurs with obtaining financing for their small business. The attorney may negotiate loan terms on behalf of clients or may act as intermediary between clients and investors. The attorney may assist clients through certain financial transactions to help ensure that there is regulatory compliance.