Word of Mouth is great for advertising for your business, but can be misleading or even harmful when it comes to getting an SBA loan. Here are some myths and their explanations from Mortgage101 and USgovinfo.
Myth: A person can get cheaper interest rates for business loans from SBA.
Fact: SBA does not give rates for loans. These are negotiable with the lender, but are limited to at most 2.75% above the prime rate in the Wall Street Journal.
Myth: SBA has no programs to assist veterans.
Fact: SBA gives veterans priority when their loan application arrives in the office or when they need business counseling to start a small business.
Myth: It takes forever to get an SBA Loan.
Fact: Loans approved require SBA’s approval and funding within two days. Completed loan applications from banks are processed within an average of ten working days.
Myth: There’s a mountain of government paperwork with each loan.
Fact: For most SBA loans, the SBA relies on the lenders paperwork only.
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Myth: You need to be turned down three times before talking to the SBA.
Fact: The SBA prefers that you have not had any lenders decline your application.
Myth: SBA loans are a last resort.
Fact: The SBA holds that they are definitely the best first stop for small businesses. SBA loans offer more benefits, better terms, and fewer fees than traditional bank loans.
