9 Tips For Getting Small Business Loans

In a previous article, mention was made of the new Obama Administration’s loan initiative. Imagine that: someone finally realizing that small businesses are the backbone of our economy. It will be creating a Small Business Lending Fund with the $30 billion just received from the large banks under TARP. These monies would be loaned to community banks who are seriously interested in making small business loans. It sounds like someone is finally listening to the plight suffered by our small businesses. Here are more details.

The government backed loans that you want to look into is the Small Business Administrations (SBA) GAAP loan used for business expansion. Now, you may be thinking that obtaining Federal Government Small Business loans through the SBA would be terribly difficult, but what if I were to tell you that 99.9% of EVERYONE that applies gets the loan immediately? Truly amazing isn’t it. For many years, the Federal Government Boca Raton Mortgage Lender have been granted to the general public, it’s simply a matter of locating the one that is best for you.

Secondly, banks are in large part in the business of making loans and they have not been doing so for some time. They will be anxious to make profits again.

Always complete any documents they give you in a very timely manner and make sure everything is filled out correctly. It can cause undue delays if things are missing or not properly filled in.

To understand this, you have to get a grasp on why more money is needed. Prior to the Act, banks were given more incentive to make loans because the SBA would step in and pay their losses by a certain percentage. When the guarantee rate went from 75% to 90%, coupled with a higher default rate because of the economy, the Feds had to shell out more money to the banks. And then there was the waiver of SBA guarantee fees which are subsidized by taxpayers-you and I. Without the money, those incentives go way.

And so what is Congress doing to find the extra funds? It is probably unlikely to secure additional appropriation in the new Stimulus Act amendments since they have already passed committee and did not include such measures. Instead, Congress is looking into any unused money under our friend (depending on what political aisle you’re sitting on) the Troubled Asset Relief Program (TARP). This originally allocated funds to prop up the secondary market. Amendments to that bill could provide some of the appropriation necessary.

A. These military loans are not like applying for a credit card. They rarely base the decision solely on your credit score. They look at the overall credit report. As to that report, they look at: 1) your credit paying history back seven to ten years, 2) the current status of your accounts, 3) the number of accounts, 4) the quality of the accounts . . .there’s a big difference between a Capital One credit card and platinum American Express, 5) how long you have had the accounts, 6) matters of public record such as judgments and tax liens, 7) enquiries, and how 8) how high your credit card balances are.

We should applaud Congress for doing their best under short notice to come up with this plan. Sure this is a form of welcome bailout for small businesses, but I believe it misses the mark as to the majority of the 27 million business owners that are simply looking for a loan they can repay, as opposed to a handout.