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“How do I finance my small business?”

Are you considering taking the BIG LEAP? That leap into business stardom, the best idea since sliced bread and the pursuit of the American dream! Or maybe you are years past the day you took the big leap, and your business is in a place of great expansion. Either way, starting and running a small business can be the greatest joy but also the scariest of times. Regardless of where you are in your journey, the question on the forefront of every owner’s mind is capital -- “how do I finance my small business?” Rest assure, in today’s market there are no shortages of capital and here are two financing options to consider:

SBA Loans

This is not your grandfather’s SBA anymore. The SBA over the years has improved greatly becoming lean, mean and downright aggressive with faster closing times. There are many SBA programs available to business owners of all shapes and sizes. Programs which allow you to purchase real estate for your business, secure working capital, equipment loans and even buy-out an existing partner with as little as 10% down. The SBA is even one of the most sought-after options when it comes to constructing a new building or expanding into a new location. Now you will incur a few more fees than your traditional lenders, but 10% down financing is hard to come by (which most of the fees can be financed within the loan vs. having to put 25-30% down for a conventional loan).

Conventional Loans

Conventional loans have always led the pack for having the lowest interest rates but the conventional credit box has more restrictions. If you are an established business, showing increased cash flow over the past three years, above average credit, and liquidity – then conventional financing is a great place to seek capital. Most banks love owner-occupied real estate loans; so there is upside to conventional loans. We always tell our clients “be prepared to put 20-30% down” which will be followed by a strong request from the financing bank to be your primary lender. Typically, your bank fees and costs to close will be less than an SBA loan but you have to factor in the impact of the extra 10-15% down payment (that can add up).

Robert Louis Capital has spent the past decade helping small business owners and real estate investors in all aspects of securing financing for commercial real estate and small business needs. If you give one of our advisors a call; we will work closely with you to come up with a loan plan to meet your specific strategy. Our goal is to be your capital advisor, sitting on your side of the table, securing the capital you need; so you can focus on your business.

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