When you hear the term "SBA loan", do you automatically think of capital lending for new businesses? If so, you're like a lot of people, who don't realize all the ways the SBA loan program can benefit an existing business. While the SBA does, in fact, offer guaranteed loan assistance to entrepreneurs looking to launch a business, there are also many ways in which they assist people who are already in business. Here are just five.
1. Revolving Credit For Your Small Business
If you have revolving credit, where you're not paying back a loan in fixed installments, but rather, continue to borrow according to the limit set by the lender, there may come a time when you need more working capital, to either establish or keep up with a revolving credit agreement. The SBA can help you out with revolving credit, so long as the outgoing capital is applied exclusively to your business expenses.
2. Disaster Recovery
Wild and wicked weather seems to befall one area of the country or another on a regular basis these days, and if you happen to be in the path of a storm or flood, you're going to need help rebuilding your business and/or compensating losses. If a tree falls on your business, for example, or extreme weather cuts into your profits, consider applying for a disaster recovery loan, backed by the SBA, at your local lender. Hopefully, you've enough insurance to land on your feet, but moving forward following such devastation can be a major challenge to any business, so reach out for that extra help, to see you through.
3. Refinancing Your Debt
If interest rates start dropping and you're stuck in an old loan, with poor terms, you'd definitely benefit from those lower interest rates, but can only get them if you're able to refinance. Talk to your local lender about refinancing under different terms, through the SBA program. The money you save in interest can be much better spent on marketing, inventory, and other business essentials.
4. New Machinery And Equipment
When things start breaking down or your business is in need of a manufacturing update, the costs are overwhelming. You likely don't have the kind of cash hanging around that you need to make your company more competitive; however, taking out a loan for this purpose is another way the Small Business Administration can assist you. These are legitimate and even necessary business expenditures, meaning you've got to put them in place, and the sooner you can, the better off you'll be.
5. Seasonal Refinancing
When your profits are only coming in during certain months, it's hard to keep up with bills for the other months. For example, if you make amazingly delicious Maple Syrup in Vermont, the incoming cash doesn't always coincide with outdoing production expenses, leaving you short at certain times of the year. To get through those times, and keep the syrup flowing, seasonal refinancing, where you pay the bills during profitable months (usually in larger payments than if you paid every month), should be a consideration.
Loan assistance from the SBA can help your business in a number of ways, but you don't have to be just starting out to benefit. They're actually available to help you at every step of the way.
Share