SBA loans are a category of traditional small business loans in which the annual interest rate is way lower than conventional loans. These SBA loans can prove to be essential when you are launching a new startup business and looking for some extra funding. These loans can help you give a boost to expand your business, purchase equipment, hire employees, and pay rent.
Just in the U.S., over 55% of new startups get help from SBA LOAN. Especially in the current situation when most small businesses are facing difficulties to generate revenue due to Corona Pandemic. Due to this situation, small businesses are forced to reduce employees, restrict their operations, and increase inventory to meet demands.
There is a long procedure that business owners must follow to get an SBA loan. This will make SBA loans hard to get than other traditional loans. Here, are somethings that can become a hurdle in the way of your loan application.
1. If You Have Poor Credit History
When you apply for an SBA loan, the first thing that the agency checks is your credit history. It is especially important that your credit report does not show any past-due balances or derogatory items. When you are applying for a loan, this can create a problem for you.
So, if you are applying for SBA loans, make sure that your credit history is clear. To get your SBA loan, you must maintain a credit score of over 680.
2. The limited Cash flow of Your Business
This is another thing that can become a hurdle between you and an SBA loan. Cash flow is the only thing that determines the success of your business. Nobody wants to give loans to such businesses that have minimum chances of getting successful. The first thing that every lender sees is the gauging health of your business.
Insufficient cash flow can flaw your SBA loan application. So, it is especially significant to show that your business has a healthy cash flow. If not, then it will increase the chances of your application getting rejected by SBA lenders.
3. Weak Business Plan
If you want to have a successful business, planning is important. The solid your business plan is, the more chances you must succeed in the market. We live in an era where everything and every business have a competitor. So, to beat your competition you need a solid plan and the same goes when you apply for an SBA loan.
If you present your SBA loan application with a week’s business plan, it will increase the chances of your application getting rejected. So, whenever you are applying for an SBA loan, you must present a strong business plan in front of SBA-approved lenders.
4. Too Many Applications
If you think that putting multiple applications at the same time is going to help your loan application process, then you are wrong. This can also create a red flag for a credit bureau, which will never end well for you.
Try to avoid sending out multiple applications at the same time. This way they can pay proper attention to your application and your record will not show any red flags.
5. Not Seeking Help Online
This is another factor that ends up as a failure in your SBA loan application. If you are applying for the first time, it is a wise choice that you get help from an expert. Now a day. Getting expert help in this matter is extremely easy online. There are many online loan experts available from where you can seek help like BitX Funding.
BitX Funding will help you get an SBA loan fast. These online lenders have a long resume of satisfied customers. They will guide you in every step of the SBA loan application process.
BitX Funding is an online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.
You can reach a loan specialist by toll-free at 1-800-824-2407, email at [email protected], or apply online here and we can guide you on which loans are the best fit for your business.