Financing of up to $5 million available to eligible businesses; online application connects borrowers with lenders
Shah J. Choudhury:
— Small and medium-sized businesses across the United States continue to rely on financing backed by the U.S. Small Business Administration (SBA) to support expansion, working capital, equipment purchases and other business needs.
Online financing marketplace Lendio is offering businesses an opportunity to apply for SBA-backed financing and connect with participating lenders through an online application process.
According to information provided by Lendio, eligible businesses may have access to SBA financing of up to $5 million, depending on the loan program, the business’s financial condition and lender requirements. Repayment terms can extend up to 30 years for certain SBA-backed financing.
The application process requires business owners to provide information about their company, financial condition and intended use of the funds. After reviewing the application, Lendio may connect qualified applicants with lenders within its network.
Financing for Business Growth
SBA-backed financing can be used for a variety of legitimate business purposes, depending on the specific loan program and lender. These may include working capital, purchasing equipment or other business assets, expanding operations, refinancing certain existing business debt and acquiring a business.
Among the SBA’s major financing programs is the 7(a) loan program, which provides relatively flexible financing for eligible small businesses. Other programs, including SBA 504 loans and Microloans, serve different financing needs and have their own eligibility requirements.
SBA-backed financing does not generally mean that the federal government directly lends money to the business owner. Instead, participating lenders typically provide the financing, while the SBA provides a guarantee under applicable program rules.
Business Owners Urged to Review Terms Carefully
Business owners considering an SBA loan should carefully review the interest rate, fees, repayment schedule, collateral requirements and any personal-guarantee provisions before accepting an offer.
Applicants should also verify the lender involved in the transaction and make sure they fully understand the terms of the loan agreement.
Lendio operates as an online financing marketplace rather than a traditional bank. While the platform can connect businesses with potential lenders, final approval, loan terms and funding decisions are determined by the participating lender and the applicant’s qualifications.
For immigrant and minority-owned small businesses in New York and across the United States, SBA-backed financing may provide an additional avenue for business growth. However, financial experts generally recommend comparing multiple offers and carefully evaluating the total cost of borrowing before making a final decision.
