SBA Loans

SBA loans - 7A government small business loans

SBA loans or government small business loans offer a wide variety of loan guarantee programs to fund small businesses that can't otherwise qualify for loans on reasonable terms.

Commercial lenders make the loans and the SBA guarantees them because the SBA has no funds for direct lending or grants.

SBA loans (government small business loans) have two important points:

1) There is no limit on the amount of capital that can be requested.

2) SBA loans 7(a) have a maximum maturity term typically of 25 years.

To qualify, you should meet these criteria: You must have a stake in the business. The theory is if you have put your own money into your venture, then you are much more likely to push harder for the success of your business.

You should have a strong business plan showing the detailed plans on how your business can make money. How will you be able to repay the loan and does your business earn enough to cover the monthly payments.

You need a good personal credit rating. The borrower's track record in paying their bills will form an important component in the loan application process.

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Tips on How to Build Corporate Credit

An arrangement between the corporation and a lender or a vendor for an acquisition to be paid on a later date is called a corporate credit while business credit is an assessment of a company’s capability to pay. For a starting company or a small business, setting up corporate credit is crucial for their new business and maintaining credit worthiness.

There are only rare cases that serious company owners will be turned down when availing a business loan when they are building corporate credit. This can even save them from using their own personal credit to fund their business. These entrepreneurs should take action on how to build corporate credit so they can easily qualify for leases, loans, or credit lines and less the common hassles.

What should be done when establishing corporate credit?

Establishing corporate credit is almost the same as building business credit. You need to furnish necessary documents and complete certain compliance check with the state government.

Here are the other actions you need to do when building corporate credit:

·         - You need to establish your business identity properly. This includes obtaining the necessary licenses and permits for your company, getting a federal tax identification number from IRS and an EIN. You must get the federal tax ID so it will not affect your personal financial credit and activities.

·         - Set up and confirm a valid business address and phone numbers that can be found in phone directories so that the credit reporting agencies can get in touch with you easily and verify the identity of your company.

·         - Open a business account for your company or apply for credit cards for business but make sure that the bank accounts and credit card accounts are not personally linked to you in any ways. This can help in building your business credit as well as your credit in cases of possible default.

·         - When looking for vendors or lenders, make sure to research for evenhanded fees and interest rates. It is always best to get in touch with vendors that can propose line of credit for office materials and supplies, furniture, and computers.

·         - Making earlier payments is always a good move as the credit bureaus use this in building up your corporate credit report although making payments on time also give the same positive effects. Maintaining this kind of financial practice will move your company to an unsecured business credit, which will merit your business more and higher range of credit lines.

Learning how to build corporate credit offers a lot of value to small businesses and startup companies. It is always an advantage for any company to have something they can depend on as the business grows. Setting up a corporate credit is just like insuring the company to yield more than profits.