Unlocking Startup Potential with SBA Loans amidst a Global Pandemic

Can we chat about SBA loans? Picture this, you’re trying to launch a new business, right smack in the middle of a global crisis. It’s no cakewalk, and that’s where the Small Business Administration, the SBA comes in. Your dreams can still take flight. You just need to know the ins and outs of how to get your business venture qualified for an SBA loan.

Decoding the SBA Loan Requirements

First things first, SBA loans aren’t directly from the SBA. Better to view them as SBA-backed loans. The lender is usually an SBA-approved bank, but the SBA puts a guarantee on the loans. Now, an SBA loan guarantee isn’t something to be glossed over. Why, you ask? Well, the SBA is a government department. Put simply, an SBA guarantee equals a government guarantee – kind of a big deal.

The SBA Difference: Lower Interest Rates

This government guarantee allows banks to give you significantly lower interest rates than most other regular loans. Rates for SBA-backed loans usually hover between 3% and 6% for a typical 7a loan, the SBA magnum opus.

So, what’s the catch? Well, to be eligible, there are a few fundamental pillars you need to comprehend. Here’s the deal:

1) For-Profit Business Qualification & CARES Act

Pre-pandemic SBA loan practices only allowed for-profit businesses to qualify. However, with the advent of the CARES Act, non-profits were given a chance to qualify as well. Still, remember, SBA loans are primarily for business organizations, not individuals.

2) Doing Business in the United States

Having a U.S. passport isn’t an automatic ticket to securing an SBA loan. You must operate your business physically within the United States. So, if you’re a U.S. resident cosy in New Guinea, planning to start an online business, you may hit a roadblock when it comes to qualifying for an SBA loan.

3) Invested Equity: Show Some Skin in the Game!

Think of the lender as taking a bet on the borrower. To secure their bet, they need to see some collateral. With SBA loans, you’ll need to show you’re invested. For new businesses, the SBA needs to see $1 for each $3 borrowed. This can be in the form of hard cold cash you’ve invested or business assets you’ve acquired. For existing businesses, requirements are more stringent. They require a $1 debt for every $4 you’re seeking to borrow.

Facing Hard Times while Running a Profitable Business

But what if, even with an SBA loan, your business isn’t thriving? Businesses are falling prey to the pandemic at an alarming rate. If bankruptcy is looming, you will need expert help negotiating your SBA loan, and that’s where Lawscape and the Lawscape come in. They can guide you through the intricacies of SBA loan repayments and loan deferment, opening up all your potential options.

4) All Other Financing Sources Must be Exhausted

The SBA also wants to see that you’ve exhausted all other financing options. It provides assurance that the liability is shared, making you a safer bet for the SBA lenders.

Your Credit Score

Remember, all of the above are just the basics; your credit score is also a hefty part of the equation. So, if you’re eying an SBA loan, start sprucing up your credit as it’s a clear indicator of how well you can manage your business finances.

What Happens if You’re Unable to Repay an SBA Loan

If you’ve met all the SBA loan requirements but find you cannot repay it, arm yourself with the best possible assistance. Lawscape and the Lawscape have a proven track record of successfully resolving SBA loan issues. Trust them to advocate for you.

Millions of Dollars in SBA and Treasury Debts Resolved

Lawscape and his team have helped clients resolve millions of dollars in SBA debts through Offer in Compromise and Negotiated Repayment Agreements, all without filing for bankruptcy or facing home foreclosure. They’ve defended against millions in Treasury Debts as well. They are authorized by the Agency Practice Act to represent federal debtors nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.