The Small Business Administration (SBA) sets the requirements in order to be eligable for an SBA loan. These conditions determine which business lenders can lend to as well as the types of loans they can offer. While the vast majority of businesses are eligible for financial assistance from the SBA, some are not. In order to be eligible for an SBA loan, a business must operate for profit, be engaged in, or propose to do business in: the U.S. or its territories, have reasonable owner equity to invest, and use alternative financial resources, including personal assets, before seeking financial assistance.
While you’re researching SBA loan options and information, chances are you’re primarily focused on the requirements to obtain the loan. While that’s important, it’s equally important to consider beyond the loan and be aware of other aspects and items In your business that often go overlooked.
Have you thought about…
As the owner, you can’t be involved in every day-to-day operations of your business. Chances are you probably have a key employee or manager in the business that acts as your right-hand person. What happens if that person quits? Will your business suffer a loss? If you are concerned about the key-EE getting injured or passing away, a solution can be to purchase life insurance or disability insurance for that key-employee. If you are concerned about the key-EE quitting and/or going to work for the competition, you can offer “golden handcuffs” to lock that key-EE in.
If you sell your business…
One of the key aspects of any business or business plan is your exit strategy. Most exit strategies typically include some type of sale or transfer of the business. If you’re looking to sell your business in the long run, is the business you are in “salable”? Can this business become obsolete? A solution can be to start diversifying some assets outside of the business into a tax-advantaged retirement account.
Something else to include is whether or not your business is a partnership. If so, do you have a buy-sell agreement, and is it funded? The cheapest way to fund a buy-sell agreement may be with life insurance and/or disability insurance.
About The Bailey Group
While we consider ourselves experienced on the topic, The Bailey Group provided more than just life insurance. If you didn’t know, we also provide disability, LTC, retirement plans, group benefits, IRAs, and brokerage accounts. If you’re a business owner also considering risk protection and benefit enhancement strategies, we also offer personal protection, key-person coverage, deferred compensation, retirement plans, and your business!
Contact Us Today! or Call 866.207.8988
Equitable Advisors, LLC (NY 212-314-4600), member FINRA, SIPC.(Equitabke Financial Advisors in MI & TN). Annuity and insurance products offered through Equitable Network, LLC, which conducts business in CA as Equitable Network Insurance Agency of California, LLC, in Utah, as Equitable Network Agency of Utah, LLC, and in PR as Equitable Network of Puerto Rico, Inc. The Bailey Group is not owned or operated by Equitable Advisors or its affiliates.
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