If you are considering taking the entrepreneurial plunge, then one of your major considerations may need to be the financing to purchase a business. One option available to those interested in purchasing a small business is what’s known as SBA (U.S. Small Business Administration) financing.
How does SBA financing work? A business buyer finds a lender who cooperates with the SBA, and up to 80% of the loan will be guaranteed to the lender by the SBA if the buyer ends up in default. This helps budding entrepreneurs tremendously because traditional lending institutions have become very gun-shy about financing in the aftermath of the economic collapse.
Sounds great, right? Ok, here’s the downside. Since the SBA is essentially a government program, it comes with a fair amount of red tape. It can sometimes be difficult to fund your business purchase this way, but it is rarely impossible. The key is to start early and talk to your business broker from the start about whether this type of financing is for you.
Have more questions? Click through the links below to find more information about SBA loans:
This is the official website of the U.S. Small Business Administration. Here you will find information on SBA options and the forms you will need to begin the application process.
An article about how to get started with a loan from the SBA.
An article highlighting the newest move from the SBA – eliminating fees for the smallest loans, which is good news for small business buyers.
Still have more questions? Contact us here or leave us a comment or question below and we will be happy to help you find out if SBA financing will work for you.