Miami SBA Loans
Owning a Business
in Miami
Miami is well-known for a number of reasons, including its Cuban heritage, pleasant year-round climate, beautiful beaches, and excellent diving spots. The Miami Heat basketball club, the Miami Tower, and the magnificent Everglades National Park are all based in the city.
Not everyone visits the city for the sites and sounds. Many people see a city like Miami and imagine the business potential. From dive bars to restaurants, and other small businesses such as marketing and advertising firms, or even landscaping and pool care – a city like Miami has incredible business potential.
So, let’s say you want to start a small business in Miami: you believe you have the perfect idea for a company that will generate high revenues and have longevity, but you don’t really have the cash on hand to start. What are your small business financing options?
SBA Loans for
Miami Businesses
One of the best types of loan you can get from a no-money perspective is an SBA Loan. The U.S. Small Business Administration (SBA) is a government agency that guarantees specific loans from lenders. These loans are known as SBA Loans. SBA-backed Loans come in different sizes and may be used for everything from long-term fixed assets to general operating expenses.
The SBA has three main types of loans: 7(a) Loans, 504 Loans, and Microloans. You will need to decide with your lender which suits you best. A quick description of each loan type:
- As the most popular loan program offered by the SBA, the 7 (a) Loan Program may aid small businesses with unique financing needs. This is your best bet for buying commercial real estate for your business, but it may also be used to fund other company needs, such as paying off existing debt or investing in equipment.
- If you’re looking to invest in some substantial fixed assets that will help your business expand and hire more people, look no further than the CDC/504 Loan Program. Certified Development Companies (CDCs) are SBA’s local partners that oversee nonprofit oversight and foster local economic growth by providing 504 loans to eligible businesses. The SBA is responsible for the certification and oversight of CDCs.
- Microloans are small, short-term loans that may be used for anything from starting a company to expanding an existing one. Microloans typically range from $7,000 to $13,000. Nonprofit community-based groups with financing, management, and technical support expertise are the intermediate lenders that the Small Business Administration (SBA) finances. Microloans are dispersed to deserving borrowers via these intermediaries.
FAQ
A Small Business Administration loan (SBA loan) is a kind of financing especially designed to meet the unique requirements of small businesses, such as those involved in setting up shop, maintaining operations, expanding into new locations, or purchasing property. Unlike conventional bank loans, which come directly from the bank, this sort of funding comes from a private lender but is guaranteed by the government.
- Companies that meet these criteria will be considered for 7(a) financial assistance.
- Profit-seeking operation
- Must meet SBA’s criteria for a small business
- Have or intend to establish a commercial presence in the United States or its territories
- Maintain a sufficient balance of invested capital
- Avoid asking for help with money until you’ve exhausted all other options, which may include selling off personal possessions.
- Have solid proof that you really need the money.
- Put the money toward a worthwhile business endeavor
- Not be in default on any loan owed to the United States government.
For both 7(a) and 504 loans, the maximum loan amount is $5 million. While the maximum loan amount for a Microloan is $50,000.
The obvious answer is that a traditional loan is not backed by the SBA. A bank or credit union is the place to go for an SBA loan application. When a borrower defaults on an SBA loan, the government reimburses the lender for the full amount of the loan, up to the guarantee amount, so long as the lender meets certain criteria. When you default on a traditional loan, the issue of paying back the lender continues to rest with you, and if the loan is secured, your secured asset will be seized.
