SBA Loan proceeds can help build your business

With longer repayment terms and lower rates, SBA-backed loans offer excellent value when you need funding to grow your small business. Lenders can have slightly different guidelines when it comes to use of funds from an SBA loan. Not only does SmartBiz Bank fund loans directly, but we work with a network of other lenders to find the right option for your business.

SmartBiz Bank helps you get a loan most likely aligned with the use of SBA loan proceeds you are seeking. Don't waste time going from lender to lender to find the right fit – we help you streamline this process. An SBA loan from SmartBiz Bank or our network is a smart solution to help you reach your unique business goals.

Use of Funds

Now the fun part! How can you use SBA loan proceeds to help you save money and grow your small business? There are lots of ways.

Working Capital

Working capital keeps businesses afloat and humming along; it's the common measure of your company's liquidity, efficiency, and overall health. Calculating working capital is pretty simple: deduct current liabilities from current assets. If your current assets do not exceed your current liabilities, you run the risk of being unable to pay your short-term creditors on time. This can lead to late fees, delayed delivery of important goods and more business crushing problems.

Business owners should make sure to have enough working capital in the bank to meet financial obligations and cover day-to-day expenses. A low-interest, long-term SBA loan can provide a steady cushion of working capital to keep your company running and growing.

Take a look at your cash flow and business plan. Could your small business use an infusion of working capital? Find out in about 5 minutes if you're pre-qualified for the best working capital loan—a low-interest, long-term SBA loan.

Debt Refinancing

You can save up to thousands of dollars per month by refinancing expensive debt. That's money that can go back into investing in your business instead of making high interest loan payments. A new loan, like a low rate, long term SBA loan, can make a big difference to your company. Here's how a debt consolidation loan can be a great savings solution.

Lower Rates: Paying off high interest money means you're lowering the cost of your capital. Your bank account and cash flow will thank you.

Longer Terms: If two loans are similar in all respects though one has a shorter term than the other, the shorter term loan will always have a higher monthly payment versus the longer term loan. Because of this, short-term loans can hurt cash flow, and very short term loans can even spell disaster for a small business owner by trapping them in a cycle of borrowing. SBA loans from SmartBiz have long terms resulting in lower monthly payments.

Hiring Employees

Is business good but your stress level is high? Perhaps you're multi-tasking like a pro but you just can't get it all done. Would an extra employee or two help your business - and yourself? An SBA loan can come to the rescue! If it's time to bring in fresh talent, proceeds from these loans can help cover recruitment, salary, benefits and other costs associated with finding and onboarding employees.

Take a look at your business plan to discover if funds can help finance one or more new hires. FitSmallBusiness co-owner Marc Prosser needed to hire additional staff in order to meet his growth goals. He's using proceeds from the SBA loan for $350,000 to add 20 staff members. “We're hiring great people with real hands-on experience,” he says.

Purchase Equipment

Every company needs equipment to run smoothly, effectively and profitably. Whether you are manufacturing products, guiding clients, or creating information, there is always equipment to buy. From computers to copiers, coffee machines to vans or cars, the sudden need to purchase new equipment can come up at any time. You might need to upgrade an older model or buy new equipment to streamline your business and speed up production. Getting an SBA loan is a low-cost way to finance major purchases that are beyond the scope of a credit card or other type of expensive funding.

Marketing

Marketing may be a great use for loan proceeds. Marketing is a must for businesses of all sizes helping to build your brand, attract customers, and increase sales. However, marketing is often the first expense cut from budgets when cash flow is tight. An established small business can spend up to 30 percent on marketing initiatives. So what should you do if your marketing budget has shrunk or is nonexistent? Consider financing marketing with an SBA loan from the SmartBiz network, just like you would finance new equipment. With low rates and long terms, these loans can open up a world of marketing possibilities. Do you need direct mail collateral? Social media advertising or a new website? Low-cost funds with long terms are the way to go so you don't stress your cash flow. The Small Business Administration writes that marketing is the key to future sales and cautions business owners not to ignore it. Explore an SBA loan to fuel your marketing efforts.

Business Expansion

Small business expansion goes beyond increasing profits. If your goal is to scale while increasing your bottom line, a low-cost SBA loan from SmartBiz is a great solution.

There are many ways your small businesses can expand. Funds from these loans can help you conduct detailed research to identify your main competitors. By diving into their target audience and product offerings, you'll be able to eliminate segments of the larger market and carve out a corner you can concentrate on for expansion. Other business expansion activities include increasing your product line. SmartBiz customer Asha Waterstreet owns Tasteful Additions, a brick and mortar store specializing in gourmet oils, vinegars and salts. She used loan proceeds to add luxury beauty products and high-end tableware to her lineup. This helped her successfully expand and keep profits steady all year.

More small business expansion activities can be kicked off with an SBA loan from SmartBiz. If you require a bigger location, different pricing or new and improved marketing techniques, look into these low-cost loans.

Qualifications

• 2+ years in business
• Business must be majority owned 51% or more by US citizens or LPR 
• Business owners must have personal credit scores above 660
• Cash flow to support loan payments
• Bankruptcies or foreclosures in the last 3 years
• Prior default on government-backed loans
• Outstanding tax liens 
• Loan proceeds cannot be used for unpaid taxes