SBA loans can provide crucial financing

Securing the funding necessary to purchase much-needed equipment or expand their businesses is often a major challenge for entrepreneurs in Illinois and around the country, and it is often loan packages backed by the U.S. Small Business Administration that provide them with financing when banks or other conventional lenders are reluctant to extend credit. Banks that offer SBA-backed loans are generally less risk averse because they know that the federal agency guarantees that at least some of the money will be repaid.

However, going about securing an SBA-backed loan can be a frustrating process for entrepreneurs. Most of these loans are what the federal agency classifies as general purpose loans, which can be used to buy or expand businesses or to make improvements or purchase equipment, but special financing packages are also available for business owners who wish to purchase real estate or need money to recover from a natural disaster or other catastrophe. Express loans that feature a faster approval process are also offered.

The qualification process for an SBA-backed loan is usually far simpler than it is for conventional financing, but entrepreneurs will still be expected to provide loan officers with documentation such as tax returns, financial statements and projections. While these loan packages are available at many banks, entrepreneurs hoping for a smooth transaction tend to seek out banks that specialize in this area or have a large portfolio of SBA-backed loans.

Experienced business law attorneys may assist business owners who are thinking of applying for SBA-backed financing by reviewing their documentation for anything that could raise red flags during the application process. Attorneys may also recommend that entrepreneurs take steps to protect their personal assets from business-related litigation by operating their ventures through a corporation or limited liability company.

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