Monday, December 28, 2015
Women Business Owners Need to Know 3 Important Facts Before Applying For a SBA Loan
SBA loans to women on the rise
In 2015, the SBA did $23.6 billion in loans, which was 23 percent more than the previous year. SBA loans to women increased by 18 percent from 2014 to 2015. This is great news for women who want to start or expand their own businesses. But before you do, here are 3 things you need to know:
#1 - SBA loans are the least expensive loan you can get. They are called 7(a) loans which guarantees up to 85 percent of loans of $150,000 or less, and 75 percent of loans of more than $150,000. These loans have a low APR; the current rate is 5.5-6.0 percent. The SBA also offers 6-year real estate and equipment loans and microloans of up to $50,000, available through nonprofit community-based organizations.
#2 - SBA loans are hard to get. The application process can be a daunting task, and requirements focus mainly on credit scores and overall health of the business. For example, women who were able to secure a SBA loan had an average consumer credit score of 689.
#3 - Be prepared in case your application is rejected. SBA loans are tough to get, so make sure you have Plan B in place if your application is not approved. This does not mean women business owners should not try; by all means they should apply. If the application is not approved, there are reputable lenders such as Kabbage, OnDeck, and Fundbox that are lender-friendly to small businesses, including those owned by women.
For more information, visit www.huffingtonpost.com/nerdwallet/3-things-women-business-o_b_8740294.html