As for other sources of funding available to small businesses and commercial solar funding, one particular type of lending instrument – the SBA loans – is quite often misunderstood.
This leads to the situation where an entrepreneur fails to secure funds that can help in expanding the business.
Here are a few common myths about SBA loan funding.
Myth 1: SBA loans are complex and hard to get.
The first one is the most common: getting an SBA loan is difficult and confusing.
At first glance, the SBA loan application process is slightly more complicated than the usual bank loan process. Using the SBA Form 413 can be intimidating if you don’t know what to do.
The Reality:
SBA loans are actually very simple to understand and apply!
The reason why? Formal Guidance and Simple Process.
Formal Guidance: Due to SBA being federal, people would think that there will be a long arduous process.
However, due to its federal nature, you have a lot of guides and resources available.
First, you can easily get assistance by going to SBA offices physically.
You can also contact the SBA via email at answerdesk@sba.gov or 1-800-U-ASK-SBA (1-800-827-5722).
Simple Process: There are only five steps in the SBA loan process:
- Gather the paperwork, such as SBA form 413 and supporting documents.
- Find the right SBA lender for you.
- Go through the SBA lender process.
- Wait for approval and
- Receive your funds.
Getting the right guidance and following the right steps to the letter, your SBA loan process should be a breeze!
Myth 2: SBA loans are costly to obtain and have high rates.
There are lots of myths about SBA loans that are not low, although they are high, such as funding, high fees, and interest rates.
Some may think that efficiency improvement implies certain costs which are not low, although it is high but one has to see the whole picture.
The Reality:
Competitive Rates: Having done this, it needs to be pointed out that major terms and conditions of SBA loans compare favorably with other loans when measured in terms of interest rates.
They are made to be fairly priced, enabling low-end businesses to be sustained for a long time.
As of August 2024, SBA loan interest rates can be between 13.5% and 16.5%.
Fees and Guarantees: The SBA may require a guarantee fee in cases where it may bear the loss, but the amount that they ask for is usually cheaper than what other lenders want.
Fees can be as low as 0% if loans are $1 million or less.
Myth 3: SBA loans are only for start-ups.
Some people believe that SBA loans can only be availed by those who are in a startup business or have a new business.
However, it is essential to understand that these loans are not exclusive to startups; they can assist any business in its development.
The Reality:
No maximum years of operation required: As long as you qualify for an SBA loan, you can successfully get one even if your business is five years old.
For example, only for-profit companies can apply for an SBA loan; nonprofit organizations cannot. Also, 51% of the company’s ownership should be citizens.
Flexibility in Fund Utilization: SBA loans are versatile in their application, and they can be used in buying equipment, working capital, real estate, among others,, and they can be used to buy equipment, work capital, and real estate, among others, or even to put or even in putting up renewable forms of energy.
Solar Energy Business as a Legitimate SBA Loan Use
Most people agree that one of the best and long-term ways of using these SBA loans is in commercial solar funding.
If you want an easier way to get an SBA, consider geting a Solar Panel system through SolarCo Energy. We have helped many business owners and companies with getting sn SBA loan.
Benefits of Commercial Solar Energy:
Good ROI: Commercial solar energy has a great ROI by itself. However, if you add the Federal and State incentives for renewable energy, you will get a better ROI.
You might even want to get your funding via a Solar Financing PPA loan.
Maximized Output with Expert Systems: SolarCo sources solar energy in collaboration with experts in the field.
We can help optimize your utility bills and increase the company’s asset value.
Government Incentives: Besides, the benefits of solar loans delay your business’s growth. SBA loans can provide funding when other lenders won’t, and you can get more benefits through incentives and tax credits offered by the government.
Conclusion
Don’t let misconceptions about SBA loans delay your business’s growth. SBA loans can provide funding when other lenders won’t.
Get your free personalized proposal today, with no strings attached.
