There are many types of SBA loans. You could call it a business loan, cash advance, short term loan, financing or working capital loans. The essential elements remain the same. When you need a business loan, the obvious criteria are loan amount, rate of interest, term of repayment, clauses in the loan agreement and if you would qualify. Not many business owners think beyond these obvious elements while considering or choosing a business loan. There is more to SBA loans than these attributes.
Here are three attributes that you must look for in SBA loans, whether it is a traditional business loan or a very short term cash advance.
Availability of Secured and Unsecured SBA Loans
Check if the lender offers both secured and unsecured loans. There are pros and cons of both secured and unsecured SBA loans when you pit them against one another. Even within the realm of secured and unsecured loans, there are substantial differences. The reason why you should look for the availability of both types of loans is simple: choice. You should be able to choose what suits you. It is possible you have some asset to use as collateral. You may not have any asset that is acceptable to the lender. You may choose not to offer any collateral even if you have an acceptable asset. Having this choice helps. A secured business loan will have more favorable terms than an unsecured cash advance so having the choice gives you the luxury to pick what is best for you in the given circumstances.
Does the lender allow loan restructuring? Loan restructuring is usually available with mortgage, car finance, large business loans, student loans and even personal loans. There is no reason why an established lender should shy away from loan restructuring as it helps the borrower and is beneficial to the lender. You get the leverage to restructure your loan given the prevailing needs and circumstances. If you don’t have the option of loan restructuring, you are stuck with the terms even if they are not suited at that stage.
Flexible Repayment Plans
Flexible repayment plans will allow you to work on your business finances without being compelled to adhere to a system that you are facing problems with. Also, the lack of flexible repayment plans will give you fewer choices. From the loan term to the loan amount, look for flexibility while considering a lender.