As a small business owner, you will experience times when you need influxes of cash. While you can research various funding resources, you will likely consider traditional business loans over alternative financing when you need significant funds to meet growth opportunities or operating expenses. Astute financial advisers may point you toward Small Business Association-backed loans. While these loans involve a lengthy acquisition process, you should seriously consider the benefits they offer. Here are the key attributes to an SBA loan for your small business.

Variety of Offerings

SBA loans come in three flavors: SBA microloans for smaller projects, that include $50,000 caps and repayment terms of up to six years; SBA 7(a) loans, offering up to $5.5 million for the big commitment but with short seven-year repayment requirements; and CDC/504 loans aimed toward specific, fixed-asset uses such as real estate though with lengthy 25-year payback allowances.

Flexibility and Availability

Choosing how you use an SBA Loan is one of its greatest values. Of the three major offerings, one may be just right for your needs. The SBA 7(a) loan is the most flexible since you can use it for a variety of business expenses. Significantly, when you need a big chunk of money, you may be able to attain this loan even when you are turned down after applying to a bank or other traditional lending source. Since the Small Business Association backs a significant portion of the loan, banks may not see you as a risk liability processing through the SBA.

Low-Stress Terms

An SBA loan can ease the burden imposed by downpayment and repayment terms. Depending on which loan you choose, your down payment can range from 20% to no money down at all compared to at least 30% for traditional business loans; and the repayment schedule is generous when you consider other loans may require loan fulfillment in as little as three months.

A Catch To Consider

These positives do come with a caveat: SBA loan requirements are quite strict, and you need to demonstrate significant business attributes. You must apply to other funding sources prior to turning to the SBA; should demonstrate a commitment to your business for a period greater than two years; be a United States-based nonprofit with over $100,000 in revenues; should possess a solid credit score; and be willing to invest time in the application process.

Small business owners looking for financing will examine a range of options. SBA loans can be a viable choice for those looking for a reliable, low-risk and proven funding source.