How To Get A 50k Business Loan
Do you have a great idea and want to start a small business? Are you already a business owner and looking for funds to expand your business? You need money to buy some new equipment or for some other reason, so what do you do? For bigger businesses, it is easy to raise funds or get loans from traditional lenders like banks. However, traditional lenders may not suit smaller businesses and smaller amounts, such as a 50k small business loan. There are several options available, but SBA loans are probably the best for small business loans.
The US Small Business Administration (SBA) offers competitive terms and high loan amounts for small businesses. Unfortunately, almost half of all small businesses fail within the first five years, making it risky for the banks to give them loans.
SBA gives loans to deserving people who have no other source for raising funds. If you are looking for a business loan, 50k may be your requirement, maybe more or less, but SBA offers great terms.
Types of SBA loans
SBA offers many options for people seeking loans. From a $ 50k business loan to a $ 5 million business loan, small business owners can get loans at affordable rates and take their business to the next level. The basic types of loans offered by SBA are:
- SBA 7 (a) loan is the most popular loan because of the low-interest rates and long repayment terms. The loan amount can be used to refinancing debt, buying real estate or equipment, or working capital. The maximum amount is $ 5 million, which is great for small business owners. Even start-ups can qualify for SBA 7 (a) if they demonstrate previous experience and have a good personal credit score. Raising a business loan 50k or more can be easy with this loan program.
- CDC/ SBA 504 loan: this loan is quite similar to the SBA 7 (a), but one major difference is that SBA 504 only funds up to 50% of the loan. A Certified Developing Company (CDC) gives the rest of the loan, which disburses 40% of the total loan value. This leaves the borrower to make the standard 10% down payment. This loan can be used for buying real estate, equipment, etc.
- SBA Microloans: it is different from other loans, only non-profit institutions can disburse the microloans. The maximum amount that one can get is a $ 50k small business loan. On average, the loan amount is just about $ 13000. The requirements to qualify for this loan are not very stringent.
Apart from these three, the other SBA loans are:
- SBA CAPLines loan
- SBA Export loan
- SBA Disaster loan
Is it difficult to get SBA loans?
Getting SBA loans depends on many factors. It is quite easy to apply for the SBA loans but getting approval is not all that simple. While applying, if you are not careful, even a small mistake can get you rejected. For bigger amounts, SBA will ask for collateral. It is the lenders who will set the terms of the loans. SBA only gives the guidelines to the lenders. Each lender will have its rate of interest and repayment schedule.
When is it difficult to get an SBA loan?
Even people with bad credit scores can get SBA loans if they fulfill other criteria. Some factors which can disqualify a person from getting an SBA loan are low overall personal or business credit score, bad credit history, not enough collateral or assets for securing the loan, insufficient free capital or cash flow to meet the repayment schedule, or if you already have excess outstanding debt.
What is Ampac Tri-State CDC?
The American Pacific Financial Corporation has been helping businesses reach their financial goals since 1978. The mission of AmPac Tri State CDC is to help small businesses with funding and support businesses using SBA funds. It mainly helps small businesses through the CDC/SBA 504 loan program. Their expertise and experience help their clients who invest with them to get better returns and, on the other hand, can help small businesses get up on their feet.
Express SBA loans
So, you are ready to take your small business to newer heights but urgently need a $ 50000 business loan. What are your options? SBA Express loans could be the perfect answer. These loans are similar to SBA 7 (a) loans; the main difference is that the express loans are approved within 36 hours. Once approved, the funds are available to the borrower within 90 days. SBA 7 (a) loan has a more grueling process and much more paperwork. The approval takes a long time, and the funds take even longer to reach the borrower. It is possible to get a maximum of $ 350000, either in the form of a term loan or as a line of credit. The SBA guarantees 50 % of the loan amount to the lenders, offering express loans more readily.
How can the SBA Express loan be used?
Though SBA places certain restrictions on how the loan amount can be used, it can still cover a wide variety of business activities.
- Used as long-term working capital
- Used as short-term working capital
- Purchase of real estate
- Purchase of equipment, furniture, machinery, materials, etc.
- Construction or renovation
- Acquiring new business or expanding an existing business
What can it not be used for?
- Repaying any wrong withholding taxes
- Making any changes in the business that may not be positive
- On anything that the SBA does not think of as ‘sound business.’
Conclusion
If, as a small business owner, you are wondering how to get a 50k business loan? Then the answer is that there is no need to worry. There are several options available, and depending on your specific requirement, you can select the one suitable for your business. SBA offers a wide variety of loans at affordable rates and easy repayment options. Take full advantage of SBA loans to ensure that your business does not suffer from a lack of funds. Go ahead with confidence and achieve your dreams.
Also Read: SBA Microloan Program