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SBA Loans: A Smart Alternative for Business Financing

Key Takeaways

  • SBA loans provide a more flexible and affordable alternative to other business financing options.
  • The SBA does not lend money to businesses; SBA loans are available through participating lenders, including Citizens Bank.
  • With a guarantee from the SBA, lenders are able to offer business borrowers flexible terms and easier qualification guidelines.

By Gina Gallagher | Citizens Bank Contributor

Businesses need credit. Not the slap-on-the-back-you’ve-done-a-great-job kind, but rather, actual financing to manage day-to-day cash flow, purchase inventory, and plan for the future. To secure that credit, many business owners use business credit cards, home equity loans, or even online loans.

The US Small Business Administration (SBA) offers what could be a more affordable business financing alternative — SBA loans

Loans with longer terms and other benefits — guaranteed

To be clear, the SBA is not in the actual business of lending. The SBA even offers an incentive to lenders: a risk-reducing, government guarantee. That guarantee frees lenders to offer businesses some pretty attractive borrowing benefits, like more favorable terms than those of other business lending options.

So what can your business do with an SBA loan? The SBA has made a wide range of loan programs available to lenders that can help you with virtually all your business borrowing needs, including:

  • Managing seasonal cash flow with working capital
  • Purchasing inventory or equipment
  • Refinancing high-interest business debt
  • Financing furniture, equipment, and technology
  • Purchasing, refinancing, or remodeling a property

Qualifying for an SBA loan

SBA loans offer business owners another advantage — more flexible qualifying guidelines. In general, to qualify for an SBA loan, you must meet the following criteria:

  • Demonstrate a business need for the loan
  • Be willing to personally guarantee the debt
  • Not be delinquent on any debt to the US government
  • Be a for-profit business and be of good character

Though SBA loans are available through a variety of lenders, the SBA grants Preferred Lender status to those lenders who make a high volume of loans. Working with a Preferred lender can make the application process easier and allow your business to gain faster approval and access to the funds you need.

With more favorable terms and easier qualifying requirements, SBA loans can be a flexible and more affordable way to get the money you need to manage and grow your business.

Ready to learn more about SBA loans?

As a Preferred SBA lender, Citizens Bank offers a streamlined application and fast decisions. We will, however, take the time to listen and understand your business and help you find the solution that works for you. Learn more about our SBA loans.

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