SBA loans are one of the most powerful tools for businesses looking to grow, yet misconceptions can sometimes deter business owners from exploring this financing option. As experts in this field, we’re here today to share the facts about SBA lending.
Let’s clear up some of the most common myths about SBA loans and set the record straight.
Myth: The Process Is Too Complex
The perception that SBA lending involves endless paperwork and a grueling approval process is one of the biggest deterrents for business owners.
The Facts:
While the SBA loan process does have steps to follow, working with the right lender makes all the difference.
- When you work with a Preferred SBA Lender like FNB Small Business Finance, loan approvals are handled in-house by an experienced SBA team, resulting in quicker turnaround times.
- When you work with a seasoned SBA team, you’ll know exactly what documentation to prepare and what to expect at every stage.
- With our team’s experience and support, you don’t have to face the process alone. Letting go of this myth could be the key to unlocking the capital your business needs to grow.
Myth: SBA Loans are Only for Very Small Businesses
Many entrepreneurs think SBA loans are meant for “mom-and-pop shops” or very small businesses, and assume they don’t qualify for financing.
The Facts:
This couldn’t be further from the truth! Whether you’re running a neighborhood café or scaling a large operation, SBA loans offer flexibility to meet diverse business needs.
- The SBA actually has broad eligibility criteria – so much so that 98% of all businesses in America qualify!
- The SBA offers flexible loan options for a range of business sizes. Businesses applying for an SBA 504 loan must have a tangible net worth of less than $20 million and an average net income of less than $6.5 million after federal taxes for the last two years. If applying for an SBA 7(a) loan, the requirements are similar but largely depend on the industry, average annual revenue, number of employees, etc.
- SBA 7(a) loans can go up to $5,000,000.
- SBA 504 loans can provide financing up to $12,000,000 and sometimes more.
Myth: You Must Have Collateral or Real Estate to Qualify
Another misconception is that businesses need extensive collateral – such as real estate – to secure an SBA loan.
The Facts:
While collateral can be beneficial, it’s not a dealbreaker.
- The SBA 7(a) loan product allows for loan approvals based on your business’s cash flow, even if you don’t have sufficient collateral.
- Our skilled lenders can craft SBA loans tailored to your financial situation, ensuring your business’s strength is the focus.
- If you don’t have real estate to pledge, SBA loans remain an excellent financing option.
Don’t let the myths about SBA loans hold you back. Whether you’re expanding operations, purchasing equipment, or simply investing in your future, SBA loans are a flexible and accessible financing solution.
Partnering with FNB Small Business Finance ensures you’re not navigating the process alone. We’re here to help you separate fact from fiction, answer your questions, and guide you to the best financing option for your business.
If you’re ready to take the next step in financing your business, contact our team today to start the conversation!
