No personal guarantee SBA loans can be a small business owners dream. It is a nice feeling to be able to work for yourself and be the next success story of rag to riches. There is the illusion that it is best to be an entrepreneur because you dont have to answer to anyone. That is very true if you only scratch the surface. Starting your own business is not as easy as some people will have you believe. Behind the few well known success stories, there are thousands who have fallen along the way side. The reason why a lot of businesses fail isnt often linked to a bad business model. At times, you can run out of cash flow and that can basically kill your business. That said, there are small business loans that are available to a lot of people to help them invest and grow their businesses or to help with emergency situations. Getting small business loan form a bank is easy if youve got some form of collateral to back up your borrowing. That is because most banks will refuse to lend you money with no personal guarantee from your part.
No personal guarantee SBA loans are a way for the US government to encourage business to stay active and grow. This governmental structure is a sort of back up program that will allow you to access finance because you dont have a personal guarantee that you can offer to banks in exchange for a loan. The process is possible by going to local banks that participate in the SBA loans initiative.
The guaranteed SBA loans help provide a form of security for banks that will facilitate your access to cash availability. This pledge will only be available if you have not been able to access other sources of financing. The government is willing to take the risk on your behalf because you will be contributing to the economy and paying taxes directly or indirectly. The fact that you dont have a house in your name or any other way to provide collateral for your borrowing doesnt mean that you will be getting a free ride. During the application process, the bank and the administrators of the SBA loan will analyze your business to make sure it is in a good financial shape in order to avoid payment default.
As a small business owner, you have invested a lot in your business and you want it to succeed. You need to remember that banks are not charities and they are there to make a profit. It is possible to get no personal guarantee SBA loans but only as a last resort.