5 SBA Myths: What New Business Owners Need to Know

The Small Business Administration (SBA) offers a number of services and loan programs to emerging entrepreneurs. However, there are a number of misconceptions about how the SBA works and what it can provide to small business owners to help their operations launch and grow successfully.

Myth 1: The SBA is a Direct Lender

This is perhaps the biggest myth circulating about the Small Business Administration. The SBA is not a direct lender. They do not approve loan requests or provide finds. Instead, they create the qualifications and guidelines for small business loans. The approval process is performed by lenders outside of the Small Business Administration.

Myth 2: Banks Are the Fastest Way to Get Loans

While banks may offer small business loans, they have internal limits on the amount of capital they can offer. Additionally, banks have a chain of command that can ultimately delay applications for SBA loans as they are sent between departments and even completely different branches. Traditional lending channels add their own layer of red tape to small business loans.

Myth 3: Private Lenders Can’t Offer SBA Loans

This is far from the truth. In fact, private lenders offer Small Business Administration loan programs to offset the bottleneck of applications occurring with traditional lending channels. Select private lenders are recognized as “preferred financial services companies.” That recognition allows them to expedite business loan requests so funds are made available much faster compared to banks and similar lending institutions.

Myth 4: Small Business Loans Have Specific Uses

The Small Business Administration offers loan programs for a wide range of uses. Some loans provide startup capital. Others offer funding for equipment and large business assets. There are even loans for commercial real estate transactions, construction, business expansion, franchises, and debt refinancing. While the Small Business Administration offers loans to cover specific needs, they provide funding for almost every aspect of business ownership.

Myth 5: The Application Process is Tedious

As mentioned above, using a preferred lender is the fastest way to get a loan application processed. Special private lenders have the ability to cut through the red tape and bring entrepreneurs the funding they need faster than other lending channels.

Wise Commercial Capital specializes in SBA loans for businesses across all industries. Our status as a preferred lender allows us to fast-track loan applications and get business owners the financing they need. Contact our offices today to learn more.

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