Lines of credit help small businesses keep operations running. They have an overall positive effect on an organization. However, many small business owners are still weary of pursuing these financial solutions. These professionals often incorrectly assume that any debt is bad for a business. But this is simply not true. An SBA line of credit is one of the best financial solutions for small business. It allows you to take advantage of current business opportunities without having to worry about financial ramifications. Find out about the different types of SBA lines of credit available from the SBA CAPLines program in the post below.
The first type of SBA credit line is called a seasonal line of credit. The SBA seasonal line of credit is available to small business owners who qualify for an SBA 7a loan. In addition, you must have been in business for at least one year. Owners must also be able to demonstrate the seasonality of their operations. Using a seasonal line of credit from the SBA allows you access to up to $5 million with a term of up to 10 years. If you are a seasonal small business owner, these are the SBA lines of credit you want to look into. That way, you never have to worry about when you should refinance.
The SBA also offers small business owners a contract line of credit. Similar to the SBA seasonal line of credit, this financial tool provides access to up to $5 million in business capital. These SBA lines of credit are used to help small businesses finance costs associated with contracting. You can use the capital infusion to help pay for assignable contracts, subcontracts and even purchase orders. This particularly contract line of credit from the SBA is available in both revolving and non-revolving solutions. Consider your needs if you do contract work for business. Then, you can determine whether or not the SBA CAPLines contract line of credit is right for your financial performance.
Another type of SBA lines of credit is available for builders. The SBA builders line of credit can be used to cover costs associated with small business construction projects. That means you can use to to pay for building materials, rental equipment, building permits, labor and inspections. They can also be used to cover landscaping, septic tank construction and utility connections costs. If you are constructing on land that costs less than 20% of the total project cost, you may also be eligible to use the SBA builders line of credit to pay for it. This is an excellent way to fund business construction. Consider this financial solution from the SBA to fund your small business construction project.
Working Capital CAPLines
Working capital is also available with and SBA line of credit. The SBA CAPlines program includes a working capital line of credit available to small business owners in need of funding, including those looking for dental practice financing. These small business financing solutions can only be used for short-term operating needs, however. The SBA also restricts small business owners from using working capital lines of credit for paying delinquent taxes, trust funds or the cost of floor planning. Outside of these restrictions, small business owners have access to up to $5 million working capital from the SBA with this line of credit. If you have operational and working capital needs for small business, manage them more easily with an SBA working capital line of credit.
There are also additional SBA financing solutions available to small business owners. Lines of credit are not the only option available to you if your business is needing financial assistance. The SBA also offers loans of all different sizes to small business operations in the United States. These SBA loans offer some of the lowest interest rates available for small business loans. They blow the private bank lending competition out of the water. If you need to finance business to grow and succeed, look to the Small Business Administration financial solutions to help you achieve your business goals.
Small business owners can often have trouble financing business projects and managing cash flow to grow business. Thankfully, lines of credit are an excellent business financing solution to fund expensive projects and operations. The SBA lines of credit available through the SBA CAPLines program are some of the best financing solutions for small business. They provide access to the capital you require with much lower interest rates than those found with traditional small business loans and give business financial leverage. Use this post to learn about the five types of SBA lines of credit available through the program for small businesses. Then, you can decide which SBA line of credit is the best financial tool to help you achieve your business objectives. Good luck!