SBA Loans

1. The Small Business Administration lends SBA loans. False The Small Business Administration does not lend money to entrepreneurs. The loans are made by a lending institution which is typically a bank or credit union. The U.S. Small Business Administration then guarantees the loan. SBA loans are designed to have broad credit eligibility criteria for those who have been denied for standard business financing. 2. SBA loan processing and application fees are costly. False SBA loan processing and application is free. Processing fees, application fees, origination fees, brokerage fees, bonus points and other fees that could be charged to an applicant are prohibited by the U.S. Small Business Administration. There is no risk to apply for SBA financing. Keep in mind though, that the applicant must have been denied traditional bank financing prior to making application through the SBA. 3. Most small businesses are eligible for SBA loans. True Although there are some businesses that are ineligible, the vast majority of businesses can get SBA financing. The SBA only provides guaranteed funding to companies they believe have good character and probability of success. The SBA will reject companies that are involved in speculation or fraudulent claims. Most start up businesses do not yet have the collateral or business success needed for approval of a traditional loan. The SBA makes the dream of small business ownership possible for many. 4. Financial statements affect whether you get approved for SBA loans. True SBA approval is based on the strength of the individual's financial statements. It is easier to qualify for SBA financing than standard business financing. The credit criteria for SBA approval are very flexible and the eligibility requirements for the loan are very broad. 5. SBA loans should be used wisely. True Proverbs 21:20 - There is a treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up. Student Loan Consolidation