Small business owners are known for their tenacity and not taking “no” for a final answer. But what options are available for entrepreneurs when they’re unable to find financing for their business through traditional banks?
The U.S. Small Business Administration (SBA) has several loan programs available to small businesses for working capital, business acquisitions, real estate purchases and more. The SBA-504 loan is one of the SBA’s premier loan products, used to purchase or construct a commercial building, make interior improvements to commercial properties or purchase large machinery and equipment. This loan has a 20-year term, low fixed interest rate and only requires a 10% down payment from most small businesses. Small businesses facing rate increases on existing commercial real estate can also use this loan to refinance their mortgage and take advantage of low SBA rates. This program is only available until September.
Another alternative financing source is the Community Advantage loan program which provides SBA-guaranteed loans up to $250,000, which can be used for business expansion, working capital, equipment purchases, start-up capital or purchasing an existing business. It’s a great fit for businesses that have some financial strengths, but don’t fit the credit criteria required by some banks. Loan terms are 7-10 years with competitive interest rates.