At Fundygo, our goal is to help small businesses obtain
working capital. With our network of flexible partners we will connect your business to a match that is best suited to help with your needs.
SBA funding is a useful option for many emerging businesses. Since this type of financing is designed specifically for small businesses, our goal is to help your company free up capital and expand operations.
With low annual percentage rates, the SBA program is one of the smartest ways to fund your company.
A small business loan can be any type of traditional loan that has been taken out by a small business entity. Both SBA and conventional business loans are issued by federally recognized banks, but an SBA loan is approved by the SBA loan guaranty program that allows you to default on a loan if you’re unable to pay and the bank will cover a portion of the debt.
A traditional loan does have this type of safety included in its terms. Benefits of a non-federally backed SBA loan include lower interest rates and a much faster approval process making them very appealing to small business owners. In general, conventional loans also feature more flexible repayment terms and conditions than SBA loans which can get tied up in federal regulations and protocol. There may only be so many cookie-cutter solutions for business funding whereas a conventional loan can be
altered and customized to the borrower’s needs. You may be wondering if you quality for a conventional small business loan, but the answer isn’t as straightforward as many other types of business loans. Normally an SBA loan has a lower bar to entry as far as credit history and portfolio go, meaning that well-established businesses are the largest demographic to be approved for a standard traditional small business loan.
Deciding whether or not you should aim for a small business loan depends on a number of factors; you must consider how quickly you need the loan, how long your business has been sustainable, as well as your existing financial portfolio and credit score.
If you’re a fledgling business just starting off in your industry and don’t have a year or more of business earnings to show, you will have a much easier time applying and qualifying for an SBA loan due to their safe nature and easy approval process. The safety net that exists for a Small Business Administration loan guaranty program means that banks are willing to take bigger risks on loans they might not otherwise be willing to take provide.
You may not need very much documentation for this process whereas a traditional small business loan requires extensive documentation such as your personal credit score (a good indicator of how you handle your business is how you handle your personal finances). In addition, you’ll need to show business documentation for an extended period of time that your company has existed along with tax forms, earnings reports, and proof of a sustainable business and financial portfolio.
You may also want to consider different loan types before taking the dive into small business loans; if the main purpose you’re going to be putting your loan towards include equipment or inventory to grow your business and give it that last push towards success, an equipment loan may be an ideal route to take. There are a few different types of equipment loans you can weigh the options for, including a secured option that is one of the easiest types to be receive.
The reason being that the piece of equipment or inventory acts as collateral for the loan itself; if you default on your loan and are unable to pay it, the bank simply confiscates the equipment and liquidates it at resale for its full value. Thus, the lender hedges its risk and is able to provide more generous loan quantities and terms.
If you own real estate you can also leverage that asset as collateral in other types of small business loans; if you’re just starting your new business and need a loan quickly and with little credit history, a real estate secured loan is a great option for receiving the funds you need. There are two types of secured real estate loans, and they’re residential real estate secured loans and commercial real estate secured loans. If you own your own home and are just starting your company, real estate loans are the way to go as using a lien on your house can encourage lenders to be more generous with their terms, rates, and quantities. If your business is established and you need to apply for a loan to grow your business at a quicker rate, real estate secured funding has the same types of conditions but just on a corporate scale.
When you apply for this type of loan, the lender essentially owns a portion of your house or business real estate and can place a lien on your property if you default on your loan. This, again, allows the lender to hedge their bets and take larger risks on loans they may not otherwise take.
If none of these options sound exactly like what you’re looking for, a line of credit may also be a possible route to take to care of your business financing needs. A line of credit will allow you to remove funds as you need them for small or major expenses; with slightly higher interest rates you’ll need to pay lines of credit quickly but it’s a great option if you don’t need the funds right away and don’t want to have to worry about a larger overhead on interest for a lump sum loan. They act essentially like a credit card under the name of your business, so if you’re familiar with owning credit cards from any major bank or credit union you should have a rough understanding of the terms that come with a line of credit.
If you’re looking to take the leap and see fast growth in your small business, apply for a small business loan with Fundygo today! We’ll help with the hassle of complex application processes and help you find the best lender option for you as the borrower.
You can outline the terms you’re looking for and our small business funding experts will help you achieve the success you’re looking for. If your business has stagnated and slowed in growth or you’re struggling to find funds for some much needed new equipment or inventory, chances are your business needs that final push to achieve greater success. Enter your information below and apply now!