Keeping your dream business growing can sometimes be more difficult than starting one. You may be having trouble trying to get more funds for your growing business, or you need quick cash to make a big purchase. If you want to grow your business, you should consider getting an SBA Express loan for a few reasons.
How does an SBA loan work?
A SBA loan is a loan that helps small business owners get resources for their business. These loans are organized by the Small Business Association (SBA), a government organization created to help small businesses. The SBA works with banks and other traditional ones lenders to ensure that loans are partially secured, meaning banks won’t lose as much money in case borrowers are unable to repay the loan on time. This partial guarantee reduces the risk of lenders losing money, which makes it more attractive for them to lend to smaller businesses.
The standard SBA loan is the SBA 7(a) loan. This loan makes it easier for small business owners to get the funds they need, but it takes time to process. Usually, it can take up to three weeks to process this type of loan. This long processing period can cause problems for owners who want to make an immediate purchase. Time is money, so if you need the capital as soon as possible, you should consider getting an SBA Express loan.
What makes an SBA Express loan different?
The SBA Express loan differs from other types of SBA loans by being faster to review than the Standard SBA 7(a) loan. While the latter might take up to three weeks to process, the review period for the former can only be up to 36 hours. This makes this loan better for acquiring property that you need right away.
But the SBA Express loan isn’t the perfect choice for everyone. Some homeowners may need more than $350,000, which is the highest principal amount the loan can give. Other owners may be turned off by the quicker turnaround period of five to 25 years. This can sometimes be because they don’t believe they can repay the loan on time. The loan also has a higher interest rate than others, ranging in rate from 4.5% to 6.5%. This might be a problem for some owners, but this might not cause a problem for you. If you’re growing your business, your expansion could generate even more cash. This would make the higher interest rate negligible and generate even better profits.
What can I do to grow my business with the SBA Express Loan?
You can use that capital to invest in assets that will help you grow your business. For the most part, you can use an SBA Express loan to get things you could acquire with most other types of loans. But to maximize the benefits of the loan, you should use it to acquire assets that may not be available in two to three weeks.
Buy real estate
One way to use that money is to buy strategically located properties. You could use this location to create a physical branch for your business, potentially making it more accessible to your target audience. This would help increase your profits even further. For example, if you are expanding a surfboard business, it would make sense to open a branch near a beach. In theory, being near the waves would make more people want to buy or rent a surfboard.
Real estate, however, is a very unpredictable market. You never know if the property where you want to open a branch will still be there in two to three weeks. Acquiring an SBA Express loan will ensure you are first in line to buy a property or piece of land. This will put you ahead of other rival companies looking to expand.
Hire more people
People are also assets you can invest in. You can increase the size of your team with the money you borrow, giving your company even more manpower. SBA Express loan money allows you to provide better benefits to workers. Offering better benefits would make people want to work for you more.
Repair, renew, replace
It is not always necessary to use a loan to buy new property. Your business may have been hit by some sort of disaster and you may not have insurance coverage for your equipment or inventory. The sooner you fix or replace these assets, the sooner you can start generating money again. This makes the SBA Express loan a good choice because you can get money for repairs as early as 24 hours.
The SBA Express Loan may be what you need to maximize your business profits, but there are other options. If you want to learn more about loans and different loan plans, visit LendingBuilder.com.
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This article was published by: Myles Leva by title: Why the SBA Express loan can be the choice to grow your business
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