Why The SBA Express Loan May Be The Choice For Growing Your Business

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  2. Why The SBA Express Loan May Be The Choice For Growing Your Business

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SBA Express Loan

Keeping your dream business growing can sometimes be harder than starting one. You may have issues trying to gain more funds for your growing business, or need money fast to make a big buy. If you want to grow your business, you should consider getting an SBA Express Loan for a few reasons.

How Does an SBA Loan Work?

An SBA Loan is a loan that helps small business owners get resources for their business. These loans are organized by the Small Business Association (SBA), a government organization created to help small businesses. The SBA works with banks and other traditional lenders to ensure that loans are partially guaranteed, meaning banks won’t lose as much money in the event that borrowers are unable to pay back the loan in time. This partial guarantee lowers the risk of losing money for lenders which makes it more enticing for them to loan to smaller businesses.

The standard SBA loan is the SBA 7(a) Loan. This loan makes it easier for small business owners to get the funds that they need, but takes time to process. Usually, it can take up to three weeks to process this kind of loan. This long processing period may cause trouble for owners who want to make an immediate buy. Time is money, so if you need the capital as soon as possible, you should consider getting an SBA Express Loan.

What Makes an SBA Express Loan Different?

The SBA Express Loan sets itself apart from other types of SBA loans by being quicker to review than the standard SBA 7(a) Loan. While the latter could take up to three weeks to process, the review period for the former can only be up to 36 hours. This makes this loan better for acquiring assets that you need immediately.

But, the SBA Express Loan isn’t the perfect choice for everyone. Some owners may need more than $350,000, which is the largest principal amount that the loan can give. Other owners may be turned off by the quicker turnaround period of five to 25 years. This can sometimes be because they don’t believe they can pay back the loan in time. The loan also has a higher interest rate than others, at a rate of 4.5% to 6.5%. This may be an issue to some owners, but this may cause no problems for you. If you’re growing your business, your expansion may generate even more money. This would make the higher interest rate negligible, and generate even better profits.

What Can I Do To Grow My Business With The SBA Express Loan?

You can use that capital to invest in assets that will help expand your business. For the most part, you can use an SBA Express Loan to get things that you could acquire with most other kinds of loans. But to maximize the benefits of the loan, you should use it to acquire assets that may not be there in two to three weeks.

Acquire Real Estate

One way you can use that money is to buy real estate in a strategic location. You could use this location to set up a physical branch for your business, potentially making it more accessible to your target audience. This would help to further increase your profits. For example, if you’re expanding a surfboard business, it would make sense to establish a branch close to a beach. In theory, being close to the waves would make more people want to buy or rent a surfboard.

Real estate, though, is a very unpredictable market. You can never know if the property you want to set up a branch in will still be there in two to three weeks. Acquiring an SBA Express Loan will ensure that you’re first in line to buy a property or piece of land. This will put you at an advantage over other rival businesses looking to expand.

Hire More People

People are also assets that you can invest in. You can increase the size of your team with the money you borrow, giving your business even more manpower. The money from the SBA Express Loan lets you provide better benefits to workers. Offering better benefits would make people want to work for you more.

Repair, Refurbish, Replace

You don’t always have to use a loan to buy new assets. Your business may have been struck by some sort of disaster, and you might not have insurance coverage for your equipment or inventory. The sooner you fix or replace these assets, the sooner you can start generating money again. This makes the SBA Express Loan a good choice because you can get the money for repairs in as early as 24 hours.

The SBA Express Loan may be what you need to maximize your business’ profits, but there are other options. If you want to know more about loans and different loan plans, visit LendingBuilder.com.

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