Why would an NJ business consider an SBA loan?

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Why Would An Nj Business Consider An Sba Loan

Small businesses and aspiring entrepreneurs in New Jersey will quickly realize that one of the biggest challenges is finding the necessary capital to start a new enterprise or keep one running.

While some may be able to attract investors who are willing to be repaid in future profits, most businesses will also have to get a conventional loan for at least some of their expenses.

Getting a loan will mean going through underwriting, offering some appropriate collateral and a down payment, and, of course, being willing to pay interest no matter how well the business performs down the road.

Small businesses may find obtaining a convention loan difficult even after taking all the right steps to do so.

After all, many banks and lending institutions might not be willing to take a risk on any startup business. If they do offer to help, the terms of the loan may be unworkable for that business.

A Small Business Administration loan can help a great idea take off

This is where a loan through the Small Business Administration, or SBA, can be helpful. The SBA has several different lending programs available to eligible small businesses.

Like other government programs, the SBA does not actually write the loan itself. It backs certain loans given by private lenders so that the lenders can feel comfortable taking a chance on a small business and offering favorable terms.

For each type of loan, a business will have to go through a detailed application process and meet eligibility criteria. In this respect, it is critically important that the information a business provides is accurate and complete.

At the same time, the business will want to put its best foot forward. After all, getting an SBA loan can be the difference between an idea taking off or failing without really getting a fair shake.

Navigating SBA loans can be complicated and involve potentially difficult legal questions.


Michael Ritigstein is a Founding Partner of the firm concentrating his efforts in supporting the firm's litigation, corporate and estate matters. Mr. Ritigstein graduated from the University of Delaware in 1996 and Seton Hall University School of Law in 2000. In 2007 he received a Masters of Law in Taxation with a concentration in Estate Planning, from Temple University's Beasley School of Law.

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