Confusion abounds in the small business loan world. You know you want to start a small business but cannot figure out what kind of business loan you need. You have it narrowed down to a small business loan of course, but even in the small business loan arena, there are a variety of different types of SBA loans.
So what kind of small business loan is right for you? Will a basic 7(a) fit your needs or do you need the 504 SBA loan? Or does your situation require a CAIP loan? Maybe a LowDoc SBA Loan is just what the doctor ordered.
If you are looking for small business loans in Los Angeles then you can visit https://www.fastbusinessfinancial.com/business-loans-los-angeles-ca/or other similar sources.
To sort this mess out let’s take a look at the various different kinds of small business loans that are available to you so that you can decide which business loan will fit your needs.
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SBA Microloan – For those in need of less than $25,000 to start your business then looking at an SBA microloan is a good place to start. These loans are designed to help get businesses off the ground or to help your business through a short downturn in profitability. It is also important to note that interest rates tend to be higher on this type of small business loan.
LowDoc – As you might expect the LowDoc small business loan requires very little paperwork. In fact, the initial application for the LowDoc small business loan consists of just one page. You can apply for a loan up to $100,000.
The LowDoc loan is made on the basis of your character and personal credit so it can be helpful to those starting small businesses but lack a business credit history.
Basic 7(a) SBA loan – This type of small business loan can range up to $750,000 and is backed by the SBA but is actually issued by commercial lenders. These SBA loans are normally relatively easy to qualify since they are backed by the Small Business Administration, a government entity.
504 SBA loan – A 504 SBA loan can be acquired up to $1 million. However, the loan cannot be used to finance more than 40 percent of the business venture or project. This type of business loan is ideal for individuals who possess strong assets and who can show the positive effect (in terms of jobs created) your business will have on the community.