As the owner of a new small business, you may be reticent about borrowing money. While it doesn’t feel good to be in debt, the infusion of money that you can get from an SBA loan may be wholly necessary to grow your business and increase its profitability.

Picture What Your Growth Looks Like

An SBA loan can help you scale up your operations and enable you to draw in more revenue. You can put a loan towards an investment such as equipment, real estate, or simply working capital. In determining the feasibility of repayment, you need to accurately gauge how the way that you purpose your loan will affect your revenue stream.

Choose a Manageable Repayment Schedule

Your ability to repay your loan shouldn’t be contingent on a big variable working out in your favor. It’s extremely important that you choose a plan for repayment that will be manageable for you in the long term. Depending on the purpose of your loan, the repayment term could be as long as twenty-five years, so you need a plan that will work well for you in the long run.

Work With a Local Lender

An SBA loan doesn’t originate from an association but rather a traditional institutional lender. It’s advisable to work with a preferred SBA loan provider in your community because it will be able to provide you with the best terms that are available to you for the type of loan that you need. In addition, it will have a sense of your region’s financial landscape and may have experience working with similarly situated borrowers.

Consider Refinancing Existing Debt

Even if your primary objective in getting an SBA loan is branching out in a new direction, you might want to consider using the opportunity to refinance your existing debt with more favorable terms or manageable repayment options. Typically, a new business won’t have strong credit, so any debt that you accrued in your early developmental stages may bear a relatively high interest rate compared to those that are available to you now.

Ultimately, an SBA loan can provide vital support towards strengthening your business and building a healthy financial forecast. Prepare a strong application by including a detailed overview of how you will use the loan proceeds and what it will do for your cash flow. Telling a compelling narrative will help you to inspire confidence in prospective lenders and assure a positive outcome.