Aldrich Law Firm, Ltd.
Aldrich Law Firm, Ltd.

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877-508-0433Good People Deserve Good Lawyers. ®

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Good People Deserve Good Lawyers. ®

Critieria for an SBA loan

Small business owners in Nevada and elsewhere may find that an SBA loan is an ideal way to acquire working capital. These loans can be used for almost any purpose, and they also come with reasonable repayment terms and interest rates. However, not just any company can qualify for such assistance. In order to meet the requirements for securing a loan, a company generally needs to have been in operation for two years or more, a credit score of 620 or higher and more than $100,000 in annual revenue.

However, businesses with credit scores of 680 or higher generally secure the best rates. During the application process, a business owner may need to submit personal financial information, such as a tax return. The SBA may also ask to see a business plan as well as a profit and loss statement as part of the loan application process.

Companies that do get approved for a loan may borrow anywhere from $5,000 to $5 million. The interest rate for such a loan is about 6.7 percent, which is lower than the interest rate on a credit card. Loan terms range from 5 to 25 years, and they can be used to refinance any existing debt that a company may have. Those who run landscaping or general contracting businesses are more likely to get SBA loans, but businesses in all industries qualify.

During the business formation process, it may be worthwhile for company owners to consider how they will secure working capital. While it may be possible to get cash from friends or family members, it isn’t always enough. Applying for an SBA loan may make it easier to make payroll, expand the company or simply provide the money necessary to make it through lean times. An attorney may help someone with the SBA loan application process.

John P. Aldrich
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