How to Find Funding to Grow Your Business

September 29, 2017 11:15 am
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How to Find Funding to Grow Your Business

Are you looking for ways to start, grow, or expand your manufacturing business? Sometimes the availability of funding can be the largest obstacle that manufacturers face. If you are looking for financing that can help, an SBA (Small Business Administration) loan might be able to provide the funds you need. SBA loans are not exactly loans in and of themselves, here is how it works.

How SBA Loans Help Grow Small Businesses

Let’s say that you decide to purchase a new building or a large piece of equipment for your business.  But, first you will need help with financing.  You won’t apply directly with the SBA for the loan.  Instead, you will apply for a loan with a bank or lender and they will work with the SBA to secure a guarantee on your loan.

How SBA Loans Benefit the Bank

The SBA program offers a guarantee to the bank or lender in order to offset some of the innate risk involved when lending to a small business. The SBA will typically offer the bank or lender a guarantee on a portion of your loan amount. The amount of guarantee will vary depending on the loan program that is used.  Guarantees typically range between 50 – 75% of the loan amount.

How SBA Loans Benefit the Borrower

SBA loans benefit the borrower by reducing the amount of down payment that is required, extending loan terms to improve cash flow, covering collateral shortfalls, extending credit when it is not available otherwise, and also to allow for projection based lending.

In order to apply for a SBA loan you will need to find a bank that offers the SBA loan programs or an authorized SBA lender. This SBA website offers a search feature to help you find a lender to fit your needs.

There are many SBA loan types available to fit a wide variety of business needs. Learn more about available SBA loans.