If you're like most small business owners, you are probably realizing that you don't have the funds in your savings accounts to cover all of the necessary expenses that come with starting a new business. Fortunately, the Small Business Administration offers a special line of loans designed specifically for new small businesses. First Bank of the Lake is proud to offer small business loans at the Lake of the Ozarks. Here are the answers to some of the commonly asked questions about these unique types of loans.
What Are The Advantages Of A Small Business Loan?
Depending on the type of loan you qualify for, small business loans offer several unique advantages. For example, SBA loans offer low down payments, long-term financing with low monthly payments, and low interest rates for qualified buyers. Most SBA loans also offer fixed monthly payments, so you won't have to worry about your monthly cost increasing in the future. However, it always depends on which program you go with.
Who Funds SBA Loans?
SBA loans are guaranteed by the Small Business Administration, but they are funded by your local financial institution - like First Bank of the Lake!
What Kind Of Down Payment Will I Need?
Typically, SBA loans require a down payment and some form of collateral. Depending on the type of collateral you are able to provide, your down payment amount will typically be somewhere in the 10-30% range of your total loan amount.
How Can I Come Up With My Down Payment?
Depending on your financial situations, you may have a couple of different options when it comes to finding the funds for your down payment. Some entrepreneurs use the equity in their home, and others ask for loans from wealthier family members.
How Important Is My Credit Score?
Some people mistakenly assume that their credit score only matters when applying for personal loans, but the truth is that your credit score will play a big role in the interest rate you can get for your business loan as well. It's never too soon to start taking steps to improve your credit score.
What Types Of Expenses Will My SBA Loan Cover?
Small business loans can typically be used to cover both fixed costs and soft costs. Fixed costs are the ones associated with buying land or a pre-existing business, utilities, machinery, renovation construction, etc. Soft costs are the expenses associated with rezoning, appraisals, environmental studies, legal fees, etc.
What Documents Will I Need To Apply?
Primarily, lenders will want to see your cost estimates, personal tax return, and business plan. The business plan is a particularly important document that outlines all financial aspects of your business, as well as your plans for operating the company. Organizing your plans into a written document will help prepare you for the challenges of running a company and demonstrate to the lender that you are prepared and ready to take on the responsibility.
What's The First Step?
After you have put together your business plan and gathered the other necessary documentation, your first step is to call your bank at the Lake of the Ozarks. Your lender will need to know what the expected costs are going to be (based on your research), what of amount of loan you want, and what the purpose of the loan will be.
The first thing you should do is talk with your lender to get pre-approved for a business loan (just as you would for a mortgage loan). Having a pre-approval letter in your hand will give you a significant advantage in the purchasing negotiations you'll face in the future, and give you a realistic look at how much you can afford to spend on your new business.
Bring Your Other Questions To First Bank Of The Lake!
If you have other questions about business loans in Osage Beach MO, don't hesitate to reach out to the team at First Bank of the Lake. Clay Lindhorst, our resident Vice President & SBA Loan Officer, would be more than happy to work with you to find the loan solution that will work best for your business. We look forward to working with you!
First Bank of the Lake - Striving For Excellence
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Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Osage Beach, MO 65065