80% of small business have no connection to their SBA branch. Why that’s a bad idea.
A recent study by Fundera, a small business lending platform, found that around 80% of small business owners have never visited their local Small Business Association. This an abnormally high number, especially when considering the benefits of maintaining a connection with a local SBA branch. Doing so could be an essential asset your business has over the competition.
More than just loans
The SBA describes its services as the “3 Cs” also known as Capital, Counseling, and Contracts. Capital is the most well-known aspect, helping small business find loans and other forms of capital. This association may explain the hesitance of so many businesses to connect with them. In the same Fundera study, it was revealed that 66% of small business borrowers go directly to big banks. If they avoided banks 66% borrowers went to family and 34% went to friends. Only 14% of borrowers went to other financial sources.
This belief that the SBA is only meant to provide loans may be one of the driving forces behind the avoidance of SBA connections. It is also a misguided one. The SBA offers a myriad of tools for small business owners. By avoiding taking advantage of them many small businesses are missing out. The other two Cs are also essential for small business growth and development.
Counseling new and existing business
The SBA offers a myriad of counseling programs, including those focused on Female run enterprises and Veteran Business outreach opportunities. Through these programs, entrepreneurs can network, learn new skills and develop the necessary goals for their small business.
The SBA also offers programs for retired executives looking for service opportunities. These programs connect retired, successful executives with people looking for firsthand experience in running a new or developing company.
Assisting with underutilized areas
The SBA’s other major function is in assisting the small business with contracts and improving business for developing communities. These programs, known as 8(a) Business development programs are mainly designed to assist economically challenged populations. Their other major program, known as HUBZone, is meant to assist in the development of businesses in communities that are underserved by large corporations.
Both programs work with businesses to understand contract rules, financial opportunities, and in finding essential equipment and material.
Loan assistance
The most well-known service of the SBA is their loan assistance programs. Through these programs, the SBA helps facilitate various forms of financial assistance, including Fixed asset financing and micro loans. The SBA does not provide these loans, with the exception of disaster relief loans, but they do guarantee a portion of the loan against default to certain banks and loaners. This means that to get an SBA loan your company will need to find and work directly with a lender that specializes in SBA financing
Each of these programs helps small business thrive and prosper, but only if the company takes advantage of them. Connecting with a local SBA branch can be the next step in a growing companies path to success.
And if your company is looking for an SBA backed loan, our team is here to help you. Our specialists can walk you through each step in the process. We help clients with their preliminary evaluation to make sure, that SBA rates are indeed the lowest that your company can qualify for. We then help you with packaging your loan, reaching out to multiple SBA lenders simultaneously, securing the one with the most favorable terms, and ultimately getting your loan funded. If you’d like to talk, we are only an email or phone call away.