SBA Loans
SBA loans offer businesses a financial boost with favorable terms and lower barriers to entry, ensuring those who have faced financing challenges can access the capital they need for growth and stability.
Lending Overview
SBA Loans
Businesses don’t always get the recognition they deserve, especially when it comes to financing. The Business Administration works to aid American businesses that have been turned down for financing in the past. By offering to act as a guarantor, the SBA works with lenders to give businesses an advantage. Interest rates are capped by the SBA, so borrowers never have to pay sky-high rates. SBA loans can be used to fund real estate, equipment, business acquisition, refinancing, working capital, and more. Down payments start at just 10%, allowing businesses to save capital for growth. It’s easy to apply for an SBA loan, even with a low credit score. Borrowers must have been turned down by other lenders and invested significant personal funds in the business. Most businesses with less than $15M in net worth can qualify if they have annual revenue of less than $5M. Ask a broker to learn which SBA loan is right for you.
Smart Strategies
How to Effectively Apply Funds
There are several loans offered by the SBA, but the two most common are the 7a and 504 loans. Both can cover real estate and equipment costs, but they differ in several important ways. The SBA 7a loan offers working capital financing in addition to real estate and other loans. Interest rates are mostly variable, but fixed options do exist. Businesses can borrow up to $5.5M with a 10% down payment. The 7a is best if you want to buy a business or get working capital. The SBA 504 loan can be used to fund real estate, equipment, and refinancing, but not working capital. Terms for both loans are 20 or 25 years for real estate and 10 years for equipment. Ask a broker for details.
Advantages of
SBA Loans
Low interest rates
Low minimums
Low credit scores accepted
Minority, veteran, and women-owned business loans are available
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Tailored Lending Solutions
Empowering Businesses with SBA Loans
Mixed Use
When you need working capital on top of real estate or equipment financing, the SBA 7a is the best option. 7a loans allow you to pay for renovations or to purchase property when you buy another business. Contact a broker to find the right SBA-certified lender to work with.
Equipment
For other businesses, the cost of equipment can be a barrier to progress. That’s why the SBA works with lenders to approve equipment loans. Borrow for up to 10 years for equipment at a low interest rate when you choose an SBA 7a or 504 loan. Ask your broker how to qualify.
Real Estate
If you’re looking for real estate for your business, the SBA can make it affordable, even if you don’t have a high credit score. Borrow $5M or more for existing real estate or to have it built yourself. With low down payments and interest rates, SBA loans are a great option. Find out more by speaking with a qualified broker.
FAQ
Frequently
asked questions
Q. Is an SBA 504 loan harder to get than a 7a loan?
That’s a common misconception. The application process is similar to applying for a bank loan. A key factor is making sure to get matched with the loan type you need by working with a broker who won’t waste your time with the wrong loan.
Q. How can I speed up the SBA loan application process?
Although the SBA offers 7a express loans, the best way to speed up the application process is by submitting a complete application that has all of the required documentation in a logical order. If you and the lender have to go back and forth with information, your application will take longer. A broker can help you double-check your application to make sure you have what you need before you submit.
Q. What is a CDC for SBA loans?
In this context, CDC stands for Certified Development Company. Certified Development Companies are nonprofits that work in local communities to put together business loans. Since SBA 504 loans require two lenders, CDCs are authorized by the SBA to coordinate funding. To get advice on choosing a CDC, speak with our team of professional brokers.
Q. What are SBA loan interest rates?
SBA loans have capped interest rates and can be fixed or variable. This rate is based on the Prime Rate and can go up or down depending on what the Federal Reserve decides. Currently, the highest rates are 4.75% above Prime, but rates vary by loan term, loan amount, and your credit history.
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