A small business is referred to as a personally owned and operated business. It typically consists of a small number of employees. As we are living in the modern age of digital transformation, most of the people run their small business digitally. Millions of websites on Shopify or Amazon can be count as a small business. Every second individual wants to start their own business and outsell their products or services. But the reality is, small business is finding it harder than ever to get loans whether it be for startup or refinancing. For every individual, getting a loan for their small business is a major hurdle due to the strict lending standards by banks and private loan providers.
What is an SBA loan?
SBA loans are not easy to get we all know that. Still, there are some guidelines that if you guys follow properly you can get SBA loan fast. SBA is one of those loans that can help you grow your small business. This loan has relatively low rates and according to the new Disaster assistance policy, the interest rate has become lower.
This is the first step to get your SBA loan to approve. You must assess that do you qualify for the loan or not. This can depend upon your credit score. To get an SBA loan it is mandatory to have a good credit score history of 650 > is the minimum range of credit score for the eligibility to get SBA loans. This also depends on the lender there are multiple lenders who can provide loans less than 650 credit points as well. One thing more SBA loan is always secure loan, so you need collateral equal to the amount of loan you want. But with the SBA PPP Loan program, there are no FICO requirements, and it’s unsecured!
What is an SBA PPP loan program?
PPP (Paycheck Protection Program) is a type of loan which is designed in such a way that it should provide incentive directly to small business owners to pay off their worker’s payroll. This type of loan will be forgiven by SBA if employees of a certain small business are kept on the payroll for 2 months. This loan can be used to pay wages to workers, rent, mortgage, or utilities.
All COVID-19 affected small business owners can apply for this loan. This loan is being distributed in two time periods. In the first period, the amount of $345 billion has been distributed among small business owners. Now, a second term has started in which over $310 billion will be going to distributed under CARES (Coronavirus Aid, Relief, and Economic Security Act) ACT.
Ways to get PPP Fast
There are certain things that you must keep in mind when you apply for PPP.
- Try to apply for PPP as early as possible
- The Paycheck protection program will provide you the amount of $10 million or 2 and a half-year month payroll.
- All the loans will be forgiven if you follow the guidelines properly.
- Check your eligibility before you apply.
- It is better to apply through SBA 7(a) lenders.
Eligibility criteria for PPP
To get a PPP loan you must ensure that your business is highly effective with the recent outbreak of COVID-19. Your business should meet all these requirements to get a loan.
- You are in business as a sole owner or with employees.
- Your business should have 500 or fewer employees.
- It can be a tribal business.
- The franchise, hotels, or restaurants should be independent.
Applying for PPP
As we have mentioned above that you can apply through already existing SBA 7(a) lender. There are over 1800 SBA 7(a) approved lenders available in the market you can apply through any one of them.
|Administration||SBA 7(a) lenders|
|The amount you can apply for||Less than 10 million|
|Rate of interest||1 %|
|Forgiveness||Yes for 75% payroll|
BitX Funding is the 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 loans specialist by toll-free at 1-800-824-2407, or email at email@example.com or applying online here and we can guide you on which loans are the best fit for your business.