Small Business Loans



1. The Small Business Administration lends small business loans.

False
The SBA or Small Business Administration does not actually lend money. The loans are made by the lending institution which is typically an individual's bank or credit union. The U.S. Small Business Administration then guarantees the financing. Business funding is designed to have broad credit eligibility criteria.


2. Small business loan processing and application fees are costly.

False
Processing and filling out the 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 SBA. There is no risk on the part of the applicant to apply for a business loan. Most people that apply for small business funding do in fact receive it.


3. Most small businesses are eligible for small business loans.

True
Although there are some businesses that are ineligible, the vast majority of businesses can get financing. A business applicant must have been denied for standard financing from their lending institution before they can become eligible for an SBA guaranteed loan.


4. Financial statements affect whether you get approved for a small business loan.

True
Small business financing approval is based on the strength of the business owner's financial statements. The financial statements allow the lender to see the owner's credit history, business ownership history, income and revenue, and money management history. It is easier to qualify for a SBA guaranteed small business financing than a regular loan. The credit criteria much more flexible and the eligibility requirements are very broad.


5. Small business 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.


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