We at Marketing Moves tend to focus on… marketing. Of course that makes sense since we are marketing students. That is what we study and so theoretically is the area of our interest. We have a diverse set of skills and focuses within the world of marketing, just as any group of marketing students will. Some want to go work for major marketing firms, contracting with different clients every month and learning the ins and outs of intriguing industries as they go. Others want to work in house for a major or minor company, performing their marketing with a laser focus and seeing if we can beat our own records every month. Still others want to do it the hard way and star their own marketing firms. Whatever their concentration they want to be the owner, the one calling the shots.
These are the people we need to speak to for this blog post. Because starting a business takes a lot of time and energy. And oftentimes, it takes a lot of money. It is true, marketing and other professional services often aren’t as capital intensive as most businesses are, but there are still costs associated with starting and running them. All of this was at the top of our minds as we spoke with Aldora Capital, a Portland based commercial lender focusing on SBA 7(a) Express loans.
The Small Business Administration – the SBA – provides these loans as a form of financing to small businesses that can prove they cannot access credit elsewhere at reasonable terms. And there are plenty of potential customers for them with over 30.2 million small businesses in the United States. It is a bit of a misnomer to say the SBA provides the loans. With this program they simply guarantee the loans so that the financial institutions they partner with will make the loans to these small businesses. 7(a) loans vary in size but can go up to $5,000,000. The program itself is meant to help American small businesses grow and prosper, and it is self-funding. This means that the SBA tries not to take money from the federal government to fund these loans.
Speaking with Aldora we learned that these are exactly the sorts of loans the people like our readers need to know more about. Since the program is meant for those that cannot access traditional financing at reasonable rates, SBA 7(a) loans would be an ideal financial product for recently graduated students trying to get their own companies started. The requirements are pretty open – certain industries are prohibited, things like gambling and finance – so most of us ought to have an easy enough time getting started.
The amazing thing about the Express loans is how quickly they can be filed. According to the SBA, in as little as three days your business can have access to up to $350,000 in capital. Now, most marketing students are not going to need that much money to start a marketing firm. Even if you are going big, and we mean big, starting a marketing firm ought to cost you far less than $100,000. According to one study, the cost to start a marketing firm in a major US city would be $70,000. Even this seems a bit high as they are factoring in $40,000 for office space. This is probably a far more ambitious product than any current or recently graduated student will be undertaking. Of course, never underestimate the power of saving money. By challenging yourself with a modified version of the 365 day savings plan, you just might be able to meet the capital requirements for a loan like this.
All that said, SBA 7(a) loans can be as little as $10,000 as well. They aren’t just for major companies trying to make a big move in their industry. It is, after all, the Small Business Administration. These kinds of loans are definitely worth checking out for any interested student. While personal factors and creditworthiness are taken into consideration, it is still feasible to gain one if you have a solid enough business plan and the right people. After all, you are going or went to one of the best public business schools in the country! You’ve probably already done a role play in the classroom on applying for a business loan. This should be a piece of cake for you!