Every small business owner aspires to access capital in critical times. It is essential for a business's survival, whether it be for smoothing the gaps in cash flow or hiring task force. Capital becomes even more important in uncertain times.
Do you lack funds to sustain your business or to complete certain projects? You can rely on many options available in the financial market. Let us tell you about SBA and how it is one of the most beneficial options.
What Are SBA Loans?
The SBA Loans are a great way to obtain financial help from a bank, micro lenders or community organizations at reasonable terms. This variety of loans are comparatively flexible than other options available in the market. It can help you in covering working capital needs as well as fixed assets. SBA has strict borrowing requirements, which make them harder to qualify for. One will need to have an excellent personal credit score as well as stable business finances.
Still, majority of SBA lenders will accept your application for multiple SBA loans; however, it comes with some limitations and added risks. One should read this post fully to make a sound decision.
Can You Take Out Multiple SBA Loans?
Yes, one can take out multiple SBA loans. If you do not exceed SBA program limit, you can take multiple SBA loans outstanding at the same time. To qualify for such multiple loans, you must have a good standing on the first loan. You must also prove to the bank that you have positive cash flow, sufficient collateral and strong credit score,
Pros & Cons of Taking Out Multiple SBA Loans!
The most basic benefit of taking out more than one SBA loan is access to capital at favorable terms. Many financial experts recommend taking out Multiple SBA Loans due to the following pros:
- You can access larger capital by applying for SBA Loans
- The down payments of the loan can be lowered down significantly
- SBA loans are offered to you at lower interest rates compared to other options
- You can negotiate longer repayment terms with the lender
However, SBA Loans also have their cons; the biggest drawback is that having multiple SBA loans adds risk to your business's balance sheet. If your business has sporadic cash flow or seasonal flow, this is not for you as it might cause trouble making monthly payments. This put the personal assets as risk. There is also a stringent borrowing limit.
Bottom Line: Taking Out Multiple SBA Loans is of great help to a business but one should be careful. Every business is different and requires unique support. Make sound decisions with the support of financial expert at all times. TI Lending is offering Quick Business Loans in India.
