If you’re thinking about taking out a loan for your new retail shop, you might be feeling intimidated: how do you go about securing financing for your small business?

Discover how to get a loan for a retail shop, what types of loans are available to you, and how to prepare to qualify in our simple three-step guide.

Step 1: Know Your Options

Trying to decide which option is best for your retail business can be overwhelming, to ease that stress we have laid out what options can benefit your business.

SBA Loans

SBA Loans are one of the post popular options when it comes to financing for small business owners. This is because these small business loans are backed by the Small Business Administration (SBA) and have favorable terms.

Although banks are still lending out money to small businesses, the SBA guarantees to pay back a portion of your borrowed funds if things don’t go as planned. This gives start up businesses an opportunity to receive funding from banks with stringent qualification requirements.

The following are the two SBA loan options you should be aware of:

SBA 7(a) Loans

There are almost no limitations on what you can invest money from an SBA 7(a) loan into, as the maximum amount you can get is $5 million. The SBA guarantees to repay 85% of loans under $150,000 and 75% of loans over $150,000, if your business were to close.

SBA 504/CDC Loans

This is the best loan for purchasing retail shopping space. This SBA Program aims to help business owners invest in fixed assets, such as property, furniture, and land. The SBA works alongside a Certified Development Company (CDC), an organization that encourages local economic development by granting 504 loans.

As with SBA 7(a) loans, you can request up to $5 million. Benefits include up to 90 percent financing, fixed interest rates, and no balloon payments.

Business Line of Credit

Small business owners are typically planning for cash flow fluctuations before they even happen. Preparing for these situations and having a plan set is key to keeping business operating as usual. If you are planning to use your funding to cover overhead expenses when these cash flow fluctuations happen, the best option for you may be a Business Line of Credit.

This type of loan has different terms compared to a standard small business loan. A set amount of funds is agreed upon but you are able to access your funds and use them as needed, rather than one lump sum upfront. As you use these funds, you pay back what was borrowed on a repayment plan.

Startup Funding

If you are interested in a start up business loan for your retail business but are unsure of the process or where to begin, this may be the best option for you. If you have been in business for less than six months, you may qualify for Startup Funding. Keep in mind, qualification is typically based largely on your personal credit history and evidence of a thorough business plan.

This will be your best option if you are getting a small business loan in retail without contracts.

Other Types of Small Business Loans

You can use a small business loan for retail to cover specific expenses or opt for a different loan type. These are alternative options for Small Business Loans:

Equipment Loans

This small business loan option is use specifically for purchases equipment for your retail store, such as cash registers, pricing guns, etc.

Inventory Financing

Like an Equipment Loan, this financing option allows you to purchase inventory for your store if you want to sell high-demand or high-value items but don’t have the cash flow to purchase them.

Personal Loans

It is possible to take out a personal loan to dedicate toward your retail shop, if you don’t need a large amount of funds. Although, if your credit score is low, you are most likely not going to qualify for a personal loan.

Step 2: Have a Plan

It is crucial to have a concrete business plan before beginning the process of applying for a small business loan. Here are some tips to keep in mind before taking that first step:

Clear Business Plan

Before you apply, make sure you have a clear, set plan for your retail business. How much will you need to spend on inventory? Who is your largest demographic? What are their spending habits? Making sure you have a clear idea of what you will need to spend your financing on is key to a successful business.

Factoring in all of the variables will allow you to estimate how much money you will need to get you retail shop off the ground and get business booming.

Know the Law

Brush up on your local laws for business owners, as well as general nationwide laws. For example, a business owner looking for a residential loan for investors would be aware of local ordinances when invested in mixed-use properties. This also includes understanding tax obligations and administrative fees to ensure your business is operating well and your loan will cover any upfront expenses.

Do Your Research

Make sure to research what similar proprietors had to invest into their business to get it up and running in your area.

Step 3: How to Qualify for a Small Business Loan

To qualify for a small business loan for a retail shop, meet specific eligibility requirements. These requirements may vary depending on the loan type and the lending institution. Most lenders will require a business plan, financial statements, references, and work history. They will also check your credit history, if your credit score is less than stellar there are still loan options for you.

Here’s what you can do to increase your chances of qualifying for a small business loan:

Practice Good Financial Habits

Lenders will examine your history and activities in terms of debt repayment. Paying your bills on time and avoiding excessive or long-term debt (credit cards), can contribute towards your ability to qualify. You can work to pay off your loan faster by setting a clear budget, starting a savings account, and cutting down on unnecessary personal expenditures.

Address Bad Credit Concerns

If you do happen to have a low credit score, you may want to wait to apply for a small business loan until you are able to build up your credit score a bit. Your credit score plays a major role in your qualification for a small business loan. Even a slight increase in your credit score could lessen your chances of approval. Your credit score will always be a factor when qualifying, especially if you are a start-up business.

Prepare a Robust Business Plan

This isn’t always required on loan applications, but it can help reassure lenders that you are prepared and have a strategy for how you plan to use your borrowed funds.

Apply for a Loan Today

Understanding the ins and outs of how to get a loan for a retail shop will make the application process much smoother. To get started, apply now with ROK Financial and get paired with a financial advisor to discuss your options.

Understanding how a small business loan works and what your options are can make the process of applying for a small business loan for your retail business go much smoother. To get started complete our 15-Second Application and talk to a ROK Financial business advisor today.

Veterans looking to launch their own brands should know about the Small Business Administration. President Dwight D. Eisenhower founded this agency in 1953. For decades, it’s helped countless aspiring entrepreneurs get their businesses off the ground, including special guidance for veterans. In this article, you’ll learn everything you need to know about SBA loans for veterans.

What Types of SBA Loans are Available for Veterans?

While the SBA isn’t the only place providing small business loans for veterans, they still offer lots of great options. The loans listed below assist veterans in different situations.

SBA Veterans Advantage 7(a) Loan

SBA 7(a) loans are enormously popular, even for those who haven’t served. Veterans Advantage loans can provide you with as much as $350,000 in loans. Plus, veterans who own 51 percent or more of their business receive lowered fees for other SBA loans.

To qualify for a Veterans Advantage 7(a) Loan, a veteran must have been honorably discharged, including being service-disabled. Active-duty members with Transition Assistance Program eligibility are also accepted, as are active reservists and National Guard members.  Spouses of the people mentioned before are also eligible, as are widows/widowers whose spouses died in action or because of a disability received during their service.

SBA Microloan

SBA Microloans cap out at $50,000. On average, these loans give borrowers around $13,000. They also typically require the borrower to provide some form of collateral. Additionally, a good deal of documentation is needed. This includes individual credit reports, tax returns for borrowers and their businesses, and financial and business plans.

Interest rates for SBA Microloans are between 8 and 13 percent. Monthly payments are required. As with any loan, it’s essential to understand your responsibility as a borrower and what the penalties for choosing a high-interest loan could be. You may consider an SBA Microloan if you’ve exhausted all other options.

Military Reservist Economic Injury Disaster Loan

If a military member is on leave and running a business, being called into action could cause chaos. The Military Reservist Economic Injury Disaster Loan provides relief to help companies to stay afloat while their owners serve their country.

These loans top out at $2 Million. However, this may be increased, depending on the number of employees. The primary purpose of this loan is to help with operating costs. There’s also a flat interest rate of 4 percent and no fees or penalty for prepayment. Any loan above $50,000 requires collateral.

SBA 504 Loan Program

SBA 504 loans are long-term, fixed-interest loans, with financing provided by three different parties. A Certified Development Corporation, an SBA-certified non-profit , provides 40 percent. A lender provides 50 percent. Finally, the borrower provides 10 percent.

You can get support from one of the more-than 260 CDCs in the United States. Some of the assets that can be purchased with financing including buildings and land, renovations and construction, and machinery.

However, refinancing debt is not allowed unless it’s for business expansion purposes. Business net worth cannot exceed $15 Million, and their net income, after federal taxes, cannot be greater than $5 Million for the last two years. Non-profit businesses are also exempt from these loans.

Qualifications and Eligibility

Across the board, eligibility requirements for SBA loans for veterans are quite similar. Aside from meeting the various standards for each loan, veterans also need to meet any of the following criteria:

• Honorable discharge status
• Service-disabled
• National Guard membership and/or on active reserve
• Spouse of any of the aforementioned categories
• Widowed spouse of someone who died in action or as a result of a service-related disability

Therefore, dishonorably discharged veterans are ineligible for SBA loans. Businesses also have to meet various criteria. In addition to being recognized as a legitimate organization, the business in question cannot be a lending or gambling organization. Additionally, non-profit organizations are eligible for SBA loan consideration.

You might meet any of those criteria but still worry about not getting accepted due to your financial status or have other questions. We cover the most critical issues below.

SBA Loans for Veterans With Bad Credit

There are small business loans for veterans with bad credit. While lenders won’t just give loans to anyone with veteran status with any credit score, there are ones who are more generous. For instance, ROK Financial approves 90 percent of veteran business loans. Check out our options here.

Bad credit can happen even to financially responsible individuals. Work on rebuilding your credit, even if it means putting off starting your business for a few years. Don’t take out loans you’re not sure you can repay or make the required payments for. Business loans for veterans with bad credit help give veterans hope.

What is Used for Collateral on SBA Loans for Veterans?

Many borrowers look for collateral loans. These are typically less restrictive in terms of credit and often come with decreased interest rates, as well as higher loan amounts. As a rule, SBA loans require collateral. Below is some of the collateral accepted for SBA loans for veterans:

• Owner’s personal assets, including home and vehicle
• Business inventory or assets
• Accounts receivable

When taking out a collateral loan, borrowers need to firmly understand the terms of the agreement and what will be at stake for not meeting them. There are organizations outside of SBA that offer business loans for veterans without requiring collateral.

Banks with SBA Loans for Veterans

Your bank can be a great source to help you receive an SBA loan as a veteran. Give them a call or stop by a branch to inquire. This list should also help you find the right bank for SBA loans.

1. Live Oak Bank

Live Oak Bank has one of the best reputations for SBA loans. In one quarterly period, they approved more than $1.4 billion in loans for small businesses.  This made them by far the most active of SBA lenders. They also have a section on their website offering advice for veterans starting their own businesses.

2. Wells Fargo

Another good source of startup business loans for veterans is Wells Fargo. Their SBA Veterans Advantage program waives upfront guarantee fees for borrowing veterans.

3. PeoplesBank

PeoplesBank is a Pennsylvania-based bank. They offer plenty of useful information for veterans looking into SBA loans.

Small Business Loans for Veterans with Disabilities

There are SBA loans for a more specific type of veteran: those with disabilities. Through the Service-Disabled Veteran-Owned Small Business Program, the federal government plans to award three percent or more of federal contracting money to service-disabled, veteran-run small businesses annually.

Eligibility requirements for small business loans for veterans with disabilities are easy to understand. Borrowers need to have at least one service-disabled veterans owning more than half of the business and running it in a meaningful capacity. Their disability must also be one received during service.

Other Lending Options for Veterans

Outside of the SBA, there are numerous high-quality small business loans for veterans. These aren’t necessarily veteran-exclusive loans, and they still require borrowers to meet different thresholds. Overall, they can be very advantageous for veterans looking for as many options as possible. These are some of the best non-SBA loan options for veterans.

Rok Financials Veteran Support

At Rok Financial, we are dedicated to all of our customers, including veterans. We offer multiple forms of assistance, including asset based loans and startup funding to help veteran entrepreneurs.

Our applications are quick and friendly, helping you find the right offer in 15 seconds. If your credit is shaky, you’re in good hands. We have no minimum FICO requirements. Plus, applicants find our fundings extremely generous. You can get your loan with us started on the same day you apply.

StreetShares Foundation

StreetShares Foundation is a non-profit focused specifically on helping veterans launch small businesses. They even started on Veterans Day in 2016. In just a few years, they’ve established themselves as one of the best organizations for business-minded veterans.

Nav’s Small Business Grant

Nav’s Small Business Grant is a very-inclusive program, offering business support to veterans and non-veterans alike. Grants are given quarterly, and winners can receive up to $10,000. There’s also a runner-up prize of up to $5,000. Even if you can’t solely rely on this grant, winning can still help you get your business off the ground.

VA Office of Small & Disadvantaged Business Utilization

The VA Office of Small & Disadvantaged Business Utilization (OSDBU) doesn’t offer direct loans or grants to veterans. However, they can act as an excellent liaison, helping veterans who may be facing financial difficulties. Veterans register their businesses. If accepted, they’ll become part of a directory, listing small businesses eligible for government contracts.

LendingClub Veteran Loan

LendingClub is another private lender helping veterans. Their veterans’ loans last between one and five years. Veterans are also able to borrow between $5,000 and $300,000, as long as they have a credit score of 600 or higher. Eligible businesses must also be at least two years old and earn $50,000 or more each year.

Hope for Veterans

SBA loans for veterans are a great way for lenders and the government to support people who have fought and sacrificed so much for this country. While there are some eligibility requirements to meet, there are few obstacles to overcome. If you’re a veteran who’s always dreamed of starting their own business, SBA loans for veterans are an amazing thing. We hope you can find the right one for you and your business.

If you run a small business and you’re looking for funding to grow it, you may have heard about SBA Loans. You may have some questions about how they work and if they are right for you and your business.

What Is an SBA Loan?

SBA loans are made in an agreement between the SBA (Small Business Administration), a government agency, and the lenders, as the SBA does not directly offer the loan.

Different Types of SBA Loans and Uses

There are different types of SBA loans; the list of loans offered is quite long. Some options are:

• 7(a) loan
• SBA 504 loans
• SBA 8(a) Business Development Loans
• SBA Microloans
• SBA Community Advantage Loans
• SBA CAPLines
• SBA Export Loans
• SBA Disaster Loans

Lenders tend to have their own evaluation process in addition to the SBA’s requirements as well, so the application process can take up several weeks of your time.

Who Qualifies for SBA Funding?

SBA loans are popular with small business owners who need quick access to funds, including startup funding. However, it can be challenging to pass the application process. One essential thing to qualify for an SBA loan is that you must have a good credit score.

Depending on who the lender is, you may want to ask about SBA loan requirements, loan terms, and how to apply for an SBA loan or other small business loans before you go ahead with it.

Part of the application process includes a business plan showing how your small business will use the funds and how you will complete the SBA loan payback. This isn’t required by all lenders, but you’ll want to be prepared if or when they ask.

1. Growing Your Business

If you have a clear set of goals you’d like to achieve, an SBA loan for a small business can be useful to grow your business in the following ways:

• Marketing and advertising
• Long-term assets
• Supplies and furnishings for your office
• Meeting payroll and hiring more employees as needed

However, keep in mind that SBA loans can be somewhat inflexible with restrictions on how the funding can or cannot be used.

2. Payroll

Several SBA loans can help you make payroll or “working capital” either short-term or long-term. Some of these options include the 7(a) loan and microloans mentioned above, as well as:

• SBA Community Advantage Loans
• SBA Export Loans
• SBA CAPLines

3. Economic Relief

What can the SBA disaster loan be used for? The SBA Economic Injury Disaster Loan Program or EIDL helps many people – businesses, private NPOs, homeowners, and renters – whose property or machinery was destroyed in a disaster.

ROK’s simple online application is a great first step, so that you can speak with a Business Financing Advisor and discuss your options.

4. Equipment

You may occasionally have to make big purchases for your business of things like machinery, vehicles, furnishing and fixtures for your office and so on.

Even smaller purchases like materials and supplies can be made with an SBA loan. You have to ensure that you can show that these purchases are vital for your business’ success or growth.

5. Real Estate: Purchases, New Construction or Renovation

SBA loans can also be used for real estate purchases and renovations. If you are buying a building, planning construction, or renting an office space, you can apply.

Apply Now

If you’d like help for your small business and think that an SBA loan is the way to go, feel free to apply now.

Getting a business loan can be tough. You need collateral to secure the loan and if you’re just starting out or a small business owner that hasn’t accrued collateral yet, this can be an issue. Assets that can be used as collateral buildings, equipment, vehicles, or even accounts receivable. If you aren’t able to pay back your loan, these assets may be seized and used to subsidize the loan.

Not having collateral doesn’t mean your business is out of the game though! Keeping your business on the move with an SBA loan is feasible if you know about the four ways to receive a business loan without collateral.

Small Business Administrations Loans

Administered by the Small Business Administration (SBA) and designed to help business owners in need of working capital, SBA loans are generated by a network of traditional lenders and guaranteed by federal programs.

Small business loan requirements and loan terms will vary depending on the lender and conditions. For instance, SBA disaster loans that are over $25,000 will require collateral management. When applying for a business loan to buy equipment, borrowers may require a loan percentage as a down payment.

You can turn to an online option for a Small Business Loan, as their standards for issuing loans can be more flexible. When looking for a lender online, finding the most financial beneficial option can be appealing but always research carefully, terms can sometimes be unclear.

Unsecured Business Line of Credit

A Business Line of Credit provides your business with cash upfront, giving you a one-time lump sum that allows you to withdraw funds as needed. You are able to repay and continue to borrow as long as you make payments on time and/or don’t exceed the limit.

Uncollateralized lines of credit are smaller than a business loan, whereas larger lines may require collateral. These revolving business lines of credit are subject to regular review and annual renewals and can have withdrawal limits.

Unsecured lines of credit offer varying interest rates for sums as low as $1,000 and as high as $100,000. For larger amounts, lenders will ask you to secure the loan with a certificate of deposit or a blanket lien on business assets.

One of the biggest benefits of this option is the opportunity to build your credit history. As long as payments are made on time, not only can you improve your credit but you may also help your business secure additional financing in the future.

These financial instruments give business owners access to short-term financing. They’re ideal for operational expenses, payroll, or managing inventory. Cyclical companies use unsecured lines of business as a source of off-season working capital.

Merchant Cash Advance

A merchant cash advance is an upfront cash amount determined by the lender and based on the business’ merchant account credit sales. This solution is an enticing option because of the fast setup and completion of the process. Businesses can expect distributed funds within 24 hours of approval.

Lenders in this venue look at risk and creditworthiness, unlike conventional lenders. Merchant cash advance providers review credit card history to determine if a business has the ability to repay their loan.

Rates may be higher, but many businesses are willing to forego this as quick funds mean fast cash and a chance to manage operational expenses that need immediate attention.

Consider overall total cost over overall time. This should not only include rates, but processing rates, account fees, chargebacks, and any potential fees associated with maintaining the merchant account. Also, take a close look at the terms and conditions; not looking below the surface can be an expensive mistake.

It’s critical that you have a good understanding of the terms of a merchant cash advance, which is essentially a short-term solution. Always make sure to compare rates. That isn’t to say that lower rates make one company better than the other, It’s more about insight for making educated decisions about a merchant cash advance. Connect with the lender and get a feel for the relationship that will benefit your business.

Accounts Receivable Financing

This option enables companies to receive early payments on outstanding invoices. Lenders use the anticipated income of the business to advance funds for a fee. There are three primary types of account receivable financing:

• Asset-based: An on-balance sheet approach with hefty fees. You make a large commitment of receivables and have limited flexibility as to which gets committed.

• Traditional factoring: A company sells its accounts receivables minus processing fees. Factored receivables go on the books as outstanding debt.

• Selective receivables financing: Lets businesses pick which receivables to put forward. Rates may be lower and, based on the program structure, may not be categorized as debt.

Benefits of accounts receivable financing include quicker cash flow and no secure collateral management. You get access to funds when you need them most by converting pending payments into cash right away! You may also enhance creditworthiness through a financial instrument that builds your reputation. Best of all, you can focus on operations instead of worrying about how you will pay for operations.

How to Get a Small Business Loan

Obtaining a small business loan without collateral requires some due diligence. Here are a few things you can do to increase your chances.

• Get Your Credit Score in Shape

If you lack collateral, the only thing you have to offer is your reputation, which is essentially your credit. One way to raise your score is to lower your credit utilization ratio; which is one of the only ways to get a small business loan with bad credit.

• Determine Cash Flow Projections

It’s important to know you can repay the debt and how. Otherwise, you will have trouble convincing lenders you will be able to repay your loan.

• Have a Business Plan for a Small Business Startup Loan

Drafting a solid business plan is more of a reference for yourself. Bank lenders may ask for one, non-bank lenders often won’t. But you’ll have a foundation of growth strategy, purpose, profit and loss, etc., this is all helpful information that enables better financial business decisions.

• Research Financing Sources

Again, know who you’re planning on doing business with. You need a resource that doesn’t require collateral but doesn’t ask for the world with high rates or stringent terms and conditions. Find out who qualifies for a small business loan with each institution, so you can focus your efforts on the ones that may be likely to approve you.

• How to Apply for a Small Business Loan

Once you have everything you need to qualify for a small business loan, go find the lending option that secures your financial future. There are many lending options ready to put you on the right track. One of our advisors can assist you in identifying the best option for you. Just complete our application form and one of them will contact you.

To put it simply, it depends! Every business’s situation is unique and some of the requirements may be difficult to accomplish. Some of these factors include..your credit score, the quality of your business plan, your previous experience working in restaurants, and the type of collateral you have.

Here’s more information on what you should know about how to get a business loan for a restaurant.

What Types Of Business Loans Can I Get For My Restaurant?

There are four main types of business loans available for new and existing restaurants and their business needs.

Small Business Loans can provide you with same-day funding. These loans typically grant a minimum of $10,000 and a maximum of $5,000,000. Both offer flexible repayment plans, with as much as a ten year repayment term.

You may be wondering, how hard is it to get a small business loan for a new restaurant? If you’re trying to open a restaurant, chances are you have done the majority of the work needed to prove you are a good candidate for a Small Business Loan.

A solid business plan is key when demonstrating that you are a good candidate for a Small Business Loan. When making a business plan for your restaurant in hopes of learning what loan opportunities are available to you, keep in mind that outlining a clear and long-term strategy can affect your maximum loan size and your repayment terms.

Startup Funding are intended for new businesses, which means companies that have been in business for six months or less. First starting your business is when you need the most cash upfront but have the least access to typical business loans.

A Business Line of Credit is a revolving loan where you are able to take out the funds that you need when you need it and repay it afterward. Rather than one lump sum at one time, you are able to access these funds when needed. A Business Line of Credit is useful for restaurant setups because they can smooth over day-today cash flow fluctuations.

Equipment Financing is a useful but specifical loan option. Unlike your other three business loan options, which can typically be applied to nearly anything you may need for your business. Equipment Financing is used exclusively for equipment needed for your restaurant, such as ovens and specialized cooking or baking equipment.

Benefits Of Financing Restaurant Equipment

Restaurant equipment can be very expensive. When buying equipment for your restaurant you want something high quality that will last your business a long time, although this equipment comes with a high upfront cost. Obtaining a Small Business Loan for your restaurant makes it much easier to purchase the equipment needed to give your business its best chance at success.

Sometimes the equipment needed for your restaurant is a little out of the ordinary. This may make you question if you are still able to receive a business loan for the unusual equipment needed, in most cases the answer is yes! Before approving the funds, they may need to check the equipment just to be sure it qualifies for a small business loan. Oftentimes, this equipment usually does get financed, so try not to worry. With this type of loan, the equipment you purchase will become collateral. If you don’t make your payments on time, the equipment will be seized.

One benefit of financing your equipment is the ability to use your funds for other things your business may need, such as hiring staff, purchasing other supplies, or advertising your business.

How Can I Apply?

You can get started with our quick 15 Second Application. We will connect you to your very own personal Business Loan Advisor, who will help you assess all of your options and find the best option for your business. Your Business Loan Advisor can also help you address topics like opening a restaurant with a Small Business Loan or even finding an investor opportunity.

If you are one of the millions of small businesses formed in late 2019 or early 2020, you’ve likely experienced some loss in 2020. And, before 2020 began, you may have applied for one of many Small Business Loans, or at least considered applying for a loan with the small business administration (SBA).

Whether your company offers a service or manufactured goods, applying for a small business loan is not exactly easy. Many small business owners have the same question on their mind as you-how do SBA loans work?

What are SBA Loans?

SBA loans are guaranteed term loans funded by approved-SBA commercial lenders.

They seek to foster and shore-up the U. S. economy. By empowering U. S. citizens with the tools to succeed as small business owners-all with the intent of injecting cash flow into communities across the United States.

Once the SBA-approved-lender initiates the disbursement of funds, the SBA safeguards that loan from 50% to 85% should the business owner default.

While intriguing, the SBA offers nine different loan types, which helps answer that lingering question: how do SBA loans work?

1. Standard 7(a) Small Loan
2. SBA Express
3. Export Express
4. Export Working Capital
5. International Trade
6. Preferred Lenders
7. Veterans Advantage
8. CAPLines are asset-based loans issued as a revolving line-of-credit for businesses not qualified for long-term credit that use collateral or an asset if the business owner defaults.

Calculating the Loan Amount and Applying for an SBA Loan

Before you even begin filling out an SBA loan application. You need to consider how much funding you need to run your small business. You need to ask yourself what the funds are for and think about how you plan to use those funds to build a successful business.

To do that, you must calculate your cost; start by completing your due diligence:

• Get a clear picture of your monthly expenses.
• Estimate your profit.
• Complete a breakeven analysis to determine when you can pay off your loan.

After you’ve completed all your initial calculations, the SBA loan application process can begin. After submitting your SBA loan application, you’ll receive instructions on how to check your SBA loan status. If you choose to apply with ROK, you can take advantage of our Business Financing Advisors to help track your approval progress.

The loan processing should go quickly, and there will be no need to check your SBA loan status daily, which inevitably provides you with the SBA loan payment and SBA loan terms sooner.

What this Means in 2020

For the first time in SBA’s history, they faced a seemingly impossible task. One they were not prepared to handle, a pandemic that shut down most of the U. S.

Despite the economic fallout, it meant the SBA needed to act swiftly and promptly. And SBA leadership required an act of Congress to respond to the 30.7 million small businesses and offer emergency loan programs such as the Paycheck Protection Program and Economic Injury Disaster Loan.

Know the Terms

The guidelines set by the SBA govern the 7(a) loan programs and continue to address that pressing question of how do SBA loans work.

• Loans amounts
• Maturity terms
• Interest rates
• SBA guarantee
• Fees

One way the SBA protects small business owners is prohibiting SBA-approved lenders from charging fees on SBA loans. All but the Export Working Capital loan.

Now that you’ve read all about the possible loans you could apply for, and what the terms could mean for you, it’s time to figure out how to apply for an SBA loan.

You can apply for an SBA loan by completing our simple 15-second online application to speak with one of ROK’s Business Financing Advisors. We’ll be able to match you with not only the best SBA financing option for your business, but you can take advantage of our streamlined application process.

EIDL and PPP Loan Terms

Both the EIDL and PPP loans cover for-profit small businesses, non-profits, and the self-employed. By offering an SBA loan for self-employed and non-profits, the SBA took a historical leap by recognizing non-profits, independent contractors, and gig-workers throughout the country as contributing economically.

The EIDL provides financial assistance to small business owners that would have otherwise financially survived “had the disaster not occurred.” But how do SBA disaster loans work?

The SBA wrote the terms on the interest at 3.75% fixed if the business is for-profit, and for the first time, the SBA offered assistance to non-profits at an interest rate of 2.75% fixed.

All loans are on a 30-year note without any off penalties or fees if paid off early. The funds for this SBA loan had a specific function of working capital and operating expenses.

The PPP loan, also congressionally approved, gave banks and lenders SBA preferred status for many U. S. banks. The loan use was to assist and incentivize small businesses to make payroll and keep people employed.

Payback and Forgiveness

SBA loan payback is another critical piece you can’t afford to overlook for one crucial reason-it helps you stay well-informed. Early prepayment penalties apply to most SBA borrowers, and these vital penalties answer a big part of that question on how SBA loans work.

The assessed fee is a percentage added to the year on which the SBA receives final payment. If paid off in year one, a 5% penalty tacks the prepayment amount: year two, 3%, and year three, 1%.

While under the COVID-19 Disaster Relief Program on SBA PPP loan forgiveness added relief to business owners applying for loan forgiveness on or before week eight or week 24.

The SBA PPP loan forgiveness rules have troubled many small business owners. One ruling sparked a lot of frustration early this year about using 75% of the PPP loan for payroll-a legislative change later reduced to 65%.

Who Qualifies for SBA Loans?

To meet SBA loan requirements are essential to understanding how do SBA loans work. Eligibility requirements for small business owners have their equity and exhausted all alternatives to fund their company before applying for an SBA loan.

Special considerations vary case by case and are applied only to a few select industries, such as franchises, farms, fishing vessels, and medical facilities.

Ineligible businesses include a broad spectrum of industries, firms, organizations, and fields, including illegal activities, prosecution, on-parole, incarceration, probation, criminal proceedings.

Coronavirus Resources

In addition to SBA disaster loans, the SBA made available COVID-19 resources online. Among other options on the SBA website is an entire page entitled, “Coronavirus (COVID-19): Small Business Guidance & Loan Resources.”

Furthermore, small business owners can check with local SBA field offices and register with state SBA to receive early updates and learn about pending legislation.

In Closing

The SBA is the go-to resource for U. S. small business owners. Whether you need immediate assistance or guidance, the resources made possible today by the internet has empowered business owners to access more information sooner.

The SBA’s mission is to ensure business owners or independent contractors succeed. Small business leaders have the charge and carry the thankless job as employers contributing to 49.2% of private-sector job rates.

Running a commercial trucking company can be challenging, before you even get your wheels on the road.  Before you can first open your doors, you must invest in at least one truck. Depending on your business plan, you may want more than one. So, who has to pay for that eighteen-wheeler?

You do, unfortunately. You may not have the capital on-hand to invest in a long-haul truck or two. With commercial truck loans or even a small business loan, you may find yourself on the road sooner rather than later.

Buying a new truck is not your only option. Let’s say you want to upgrade your vehicle or repair an existing long-haul truck for your company; the best commercial truck loans can help you upgrade, while commercial truck repair loans assist with the former.

How Funding Can Help?

Securing funding for commercial or semi-truck financing is vastly different from a personal vehicle loan. For starters, the standard interest rate for commercial used truck loans can range from 5% to 30%, unlike the sub 5% rates for personal auto loans.

Most commercial truck drivers, while business savvy, may not have the funds readily available to outright purchase a truck, upgrade their existing vehicle, or pay for extensive repairs. In these cases, financing is the only route. It’s not a bad option, either.

With a commercial truck loans calculator, you’ll quickly discover how much you’re eligible to borrow, your monthly payments, and commercial truck loans interest rates to get you started.

What Are My Best Options?

When it comes to commercial truck loans, a bank may not be your best option. Whether you require a bad credit commercial truck loan or a commercial truck equity loan, chances are you’re better off with a private lender over a credit union or hometown bank.

Commercial truck financing is available for:

• Buying a new or used commercial truck
• Leasing a new or used commercial truck
• Repairing or upgrading a commercial truck

Equipment Financing

With equipment financing options, the commercial truck you purchase acts as collateral against the loan. Say, for example, you miss a payment. The lending company would seize the truck.

This has both positives and negatives. You do not have to put up any other assets as collateral besides the truck, which is good. If the truck is your only source of income, this may not be so good for your business. If anything were to happen that would prevent you from driving, you may not be able to make payments on time and the lender may  seize your truck.

Business Line of Credit

Technically speaking, as a commercial truck driver, you are a small business-at least, to start. As such, you likely qualify for a business line of credit. A small business line of credit is an unsecured loan solely for businesses without a lump-sum disbursement, in which the loan itself acts like a credit card.

You pay for supplies, equipment, gas, etc. Then you repay the amount spent over time, gradually paying down the balance.

Small Business Loans

If you can prove to the bank or a lending company that your business is a sound investment, with a business plan, resources, and experience, then chances are you will be approved for a small business loan. Although, alternative financing companies do not typically require a business plan to be approved.

The thing about a small business loan is the amount you can borrow varies. In some cases, you may not receive enough to purchase a new truck or jumpstart your trucking company. You may need to pursue other options alongside a small business loan.

How Can I Qualify?

It’s important to note that not all lending companies are equal, some enact lending requirements that significantly vary from their competitors.

The general qualifications for commercial truck loans include:

• Information on the commercial truck you have in mind
• A reputable vendor
• Good credit score
• Time in business
• Zero negative marks on your credit report
• A downpayment
• Trucker’s insurance

You will find that many lending companies flat out refuse to finance a used commercial truck. If your goal is to buy second hand – saving some money in the process – spend a little more time researching lending companies that specifically cover used vehicles.

With these above qualifications in place, most of which are easy enough to achieve, you’ll soon have a commercial truck to start your long-haul or delivery business with little hassle. Even if you don’t have stellar credit, securing a commercial truck loan is possible!

Kickstart your commercial trucking career, and apply now for a commercial truck loan! You’ll get matched with a Business Financing Advisor at ROK to help you find the best option.

When your small business needs funding, an SBA loan may be a great alternative to more common small business loans.

What is an SBA loan?

Simply put, they’re small business loans that are partially backed by the Small Business Association (SBA), a government agency. Because the SBA backs the loan, at least in part, lenders can offer funding on more flexible terms.

Banks and other financial institutions offer SBA loan terms based on the business’s financial records, credit reports, tax returns, and past loan history.

At this point, you might be asking how to get an SBA loan, but you may want to consider a more important question first: how long does it take to get an SBA loan approved?

How Long on Average Does it take for SBA Loan Approval?

In short, SBA loans aren’t known for a fast approval process. Unfortunately, they tend to take about six months, however there are other ways to get you the financing you need in the interim.

Six Months

Yep, you read that correctly. On average, after you apply for an SBA loan, you’ll have to wait six months before you see “approved” on your SBA loan application status.

See, when you submit your SBA loan application to the lending organization, they have to turn around and apply to the SBA to get the loan guaranteed. This multi-step process takes more time than other financing possibilities. If you choose to apply for an SBA loan with ROK, our streamlined process reduces that time to as little as 45 days!

Contributing Factors

On top of that, lenders aren’t always well versed in the SBA loan process, which can extend the time it takes to get approved. And, small business owners are usually required to submit a large amount of information, which can be hard to provide.

Lenders want to see that the small business will be able to make SBA loan payments, which means they’ll want to see credit histories and tax returns. More so, the SBA itself won’t guarantee the loan until they’re sure your business meets their rather stringent requirements.

There are SBA disaster loans available for small businesses impacted by regional and national crises. If you’re wondering how to apply for an SBA disaster loan due to COVID-19 or any regional disaster (floods, hurricanes, etc.), the process is the same but expedited.

That said, even disaster loans take at least 21 days to process, which may not be fast enough, depending on your situation.

What if I need Funding Sooner?

You thought you wanted to know how to apply for an SBA loan, but now you may be wondering about other options. Luckily, there are plenty of other ways to fund your small business needs fast.

Even if you need a small business loan despite bad credit or a lack of time in business, funding options exist. ROK Financial offers both Asset Based Loans and Lines of Credit, which offer same-day funding if approved!

Apply now, and we’ll connect you with a knowledgeable Business Financing Advisor so you can find out which options are right for your small business. The application is simple, and we’re sure that, with our help, you can get back to business!

Amid the 2020 pandemic, restaurant owners have been facing more setbacks than ever when it comes to keeping their business afloat. As a result, they are seeking information on how to get a restaurant business loan.

If you run a restaurant, you more than likely have been looking for ways to improve your restaurant’s finances. There are a few different ways to find support for your business, and in this article, we will be discussing Small Business Administration loans or an SBA loan for restaurant owners.

How Can an SBA Loan Help Your Restaurant

An SBA loan for your restaurant can support your business endeavor in many different ways, which can ultimately help increase your profits.

One of the most commonly sought-after small business loans is the SBA 7(a) loan, which can provide valuable financial backup for essential needs. The SBA 7(a) loan is a good option if you have not had luck securing other means of financial assistance.

Buy Your Restaurant

A startup loan can help if you are still in the beginning stages of setting up your business. One of the biggest roadblocks for aspiring restaurant owners is getting the money to buy a building or even a food truck.

You will need a designated space to cook the food and serve it. With an SBA loan, you can get the backup needed to obtain this space, including purchasing real estate. Furthermore, a loan can help you buy a building for your restaurant and finance the land on which the building sits.

Purchase Equipment

Once you’ve purchased or rented space, you will also need to buy the many pieces of equipment necessary to keep a restaurant running, and it doesn’t come cheap. A loan can help increase the range of restaurant equipment, and quality, available to you.

Equipment Financing for Restaurants

Equipment financing for restaurants is often a necessity. A restaurant can’t function without the proper equipment, and having access to the right equipment can make or break a restaurant, especially within the first year.

The SBA 7(a) loan covers restaurants’ financing, and it will cover certain staples you need to stay open. Restaurant equipment financing can cover POS systems, ovens, fryers, shelves, office equipment, and more.

What This Means for Your Business

SBA loan qualification will make a big difference in achieving the necessary restaurant funding to get your eatery started. It can also take some of the weight off your shoulders, so you can focus on creating something special.

Large expenses, such as real estate and equipment purchases, will be less of a worry once you have been able to secure financing. However, the challenges don’t end here, as there will still be a lot of investing and personal funds needed to keep the restaurant running smoothly.

Overall, however, securing loans to buy your restaurant and fund equipment purchases can ease your journey into small business ownership. It can take time to turn a profit, particularly when you have loan payments, but many startup loan options for restaurants have flexible terms and low rates.

Of course, there are limitations to what you can use the funds for, and the amount you can borrow depends on a handful of factors.

How Can I Qualify?

Like any government loan, there are certain conditions in which a business owner will not qualify for an SBA loan. Even if you meet the qualifications and do not have bad credit, or former business startup loans, there is no guaranteed loan approval. Unfortunately, the myth of “guaranteed” loans is just that; there are many qualification metrics and minimum standards for SBA loans.

Owners who are applying for an SBA loan will need to meet these standards to qualify for a loan:

• The business must be working for profit. These loans are not available for non-profit organizations.
• The owner of the business cannot be on any form of parole.
• The business must be run and make a profit in the US or the US territories.
• If you have been able to secure other forms of financial assistance for your restaurant, you must first use those resources.
• The business owner must have invested, either with money or with property, equity into the business.

If you have met all of the above qualifications, you will likely qualify for an SBA loan. Keep in mind that the SBA itself is not the business lending you money. SBA loans are available through banks, credit unions, or other institutions centered around lending money.

And of course, with any loan, you will deal with terms and conditions. These terms specify how much money you will be receiving and for how long. It is important to hold on to and remember all the information about your business loans collected during the process.

What Are My Options?

The SBA 7(a) loan is an example of one of many SBA restaurant loans. Depending on the restaurant and business you are running, you may find that other restaurant loan options suit your funding needs better. Before sorting through all of your options, it would be wise to speak with a Business Financing Advisor. You can speak to an advisor today for free by completing ROK’s 15 second online application!

Finding an investor for a restaurant can play an important role in how the restaurant succeeds. Personal networking is a good place to start, but some banks may be willing to work with you on finding support. Research and looking at how to find investors for a restaurant can also give you a good idea of how much money you will need to start your business.

There are also the SBA Express Loan, the SBA 504 Loan, the SBA CAPLines, and the SBA Veterans Advantage Loan. These loans are viable options depending on the needs of the restaurant. They are each catered to specific demands that may come up depending on the business you are running.

We recommend surveying your restaurant’s business and identifying what you need finance-wise. It is a good idea to have a strong understanding of what your business needs to run based on your restaurant’s location and size. Obtaining an SBA loan for restaurant owners may not be simple, but it’s an excellent step toward your future as a small business owner.

Many entrepreneurs require a small business loan to get started; however, choosing the right business loan can be intimidating. Fortunately, there are several different avenues of business loans to choose from, including an SBA loan.

What is an SBA loan? What is an SBA 504 loan? How does it work? What is the difference between an SBA 504 loan versus other SBA loan programs?

What is an SBA Loan?

With an SBA loan, the US Small Business Administration partners with lenders to get loans for small businesses. Rather than directly giving money to small business owners, the SBA sets criteria for loans.

The rationale behind using this lending model is that it poses less risk for lenders and lending organizations, which makes small businesses receiving a loan a much more straightforward process. Here are some other advantages of using an SBA loan:

• Competitive rates and fees
• Potentially unique perks involved such as no collateral or lowered down payments
• Continued loan counseling

What Can SBA Loans Be Used For?

This entirely depends on the particular SBA loan you apply for, but you can use SBA loans for the following:

• Purchasing equipment
• Startup funding
• Purchasing real estate
• Business expansion
• Functioning capital

SBA Loan Requirements

SBA loans have specific requirements for a business, including:

• Having depleted other financing options
• Must be located in the US
• Have to be operating in and approved by the SBA
• Hold a business status of for-profit
• Must be part of SBA size standards

SBA Loan Payment

Fortunately, SBA loans are among the more affordable small business loan options. The average interest rates on SBA loans are 7-8%. However, the SBA does charge a fee for a loan guarantee, but they waive (the fee) for loans up to $150,000.

The amount of the SBA loan payment each month depends entirely on each individual business’s situation. Make loan payments online, by mail, or via telephone.

How to Apply for an SBA Loan

Before applying for an SBA loan, it’s best to speak to a Business Financing Advisor to determine your business’s most ideal financing options. If an SBA loan is the best avenue of funding for your business, apply now or visit the official SBA website for an SBA loan application.

What is an SBA 504 Loan?

An SBA 504 loan, aka an SBA CDC/504 loan, provides small businesses financing on a long-term basis for assets not likely to be quickly turned into profit, such as buildings, equipment, land, and more. People commonly call this loan a commercial real estate loan.

One characteristic that sets SBA 504 loans apart from other SBA loans is that these three entities are needed to issue the loan:

• SBA-approved certified development company (CDC)
• The borrower
• The bank

Here are some advantages to using an SBA 504 loan:

• Competitive interest rates with a potential fixed loan rate
• Backed by the SBA
• Lower down payments
• Own rather than rent/lease fixed assets
• Business owner receives real estate appreciation and tax perks
• Lower fees than other small business loans
• Long-term coverage
• The majority of small businesses are eligible

How Does the SBA 504 Loan Work?

The SBA 504 loan works differently than other SBA loans that are typically halfway guaranteed by the SBA and given by an official SBA lending associate. With the SBA 504 loan, there is a specific breakdown of percentages involved:

• 10%-Down payment from the small business owner/borrower
• 40%-Loan provided from a CDC; an SBA approved business that promotes facilitate economic success
• 50%-bank loan or another lending organization

SBA 504 Loan Rates

SBA 504 loan rates consist of interest rates from both the CDC and the bank’s loan contributions. The SBA determines the CDC rates, and after a tedious calculation process, the CDC interest rates usually range between 3-6% and are fixed.

The bank portion of the loan varies considerably because the borrower and the small business’s quality determine the interest rate. Bank loan rates are higher than the CDC’s and can be variable or fixed depending on the bank’s discretion; however, they do not typically go above 10%.

What’s the Difference Between an SBA 504 and an SBA 7A?

Both are small business loans, but they have more differences than similarities. For example, an SBA 504 is geared for fixed assets, whereas the SBA 7A covers more of a broad range and covers anything from purchasing buildings to business supplies. The SBA 7A can also be an option for short or long-term financing, and the SBA 504 covers long-term.

Both also vary widely in loan terms, depending on what each loan covers. The SBA 7A is also a considerably lower loan size, has both variable and fixed rates, and requires a minimum of 10% from the loan applicant.

Other SBA Loan Programs

SBA Disaster Loans

The SBA Disaster Loan is a lower interest rate loan covering businesses after they’ve encountered a significant event or catastrophe. SBA Disaster Loans essentially keep companies from going out of business, can cover damages unpaid by FEMA or insurance, and cover operating costs lost due to the event.

Economic Injury Disaster Loans

Economic Injury Disaster Loans, or EIDLs, are small business loans that help struggling organizations during temporary loss of income. The SBA is currently issuing many EIDLs due to the COVID-19 pandemic, including the new part of the EIDL grant, called the Paycheck Protection Program. The PPP gives small business employees paychecks affected by shut-downs during the pandemic.

If you’d like to start an EIDL loan application, check EIDL loan status, or apply for an SBA EIDL grant, click here to get started.

If you’ve already applied for an EIDL loan and need more funding, check out options for asset-based loans.

Summary

SBA loans are useful, government-backed financing options that can be used for various small business expenses, depending on the SBA loan. There are several different SBA loans to apply for, but if you need long-term financing for fixed assets, then the SBA 404 loan is appropriate. If your business needs broader financing coverage, look into an SBA 7A.

For businesses experiencing financial hardship due to the pandemic or significant events, applying for an SBA disaster loan, EIDL, or EIDL grants would be suitable options. For more information, visit our apply now to speak with an advisor today!