Young Businesswomen

WHAT IS A SBA LOAN?

A Small Business Administration Loan (“SBA Loan”) is a small business loan program administered by the Small Business Administration and is partially guaranteed by the government. This program works with other financial institutions to help give small businesses access to working capital that has longer terms and lower interest rates. Most businesses seeking working capital to purchase inventory, operate or expand a business can benefit from a SBA Loan.

Ideal Financing For Your Business

Many companies have business needs such as expanding in technology or location, payroll needs, new marketing endeavors, which require access to working capital that have longer terms and lower interest rates. SBA Loan amounts typically range from $5,000 to $2 million dollars upon approval. Due to the fact that an SBA Loan is partially guaranteed by the government, it helps reduce the lender’s risks, which allows for the lower rates and longer terms.

 

Working Capital

SBA Working Capital loans are a great option for entrepreneurs who need funds for business operating expenses. These loans fall under the category of SBA 7(a) loans.

 

Debt Consolidation

With rates between 5-8% and terms between 5-25 years (depending on program and loan uses) refinancing debt through SBA loans offers affordable lending solutions for small and growing firms.

 

Equipment Purchases

SBA 7(a) Loans can be a great solution for financing long-term equipment. SBA International Trade loans can be used for fixed assets for construction, building, and real estate equipment for export transactions.

Avg. Term Length: 24 - 60 months

 

SBA Loan Details

Qualifying Criteria:

Required Items:

  • 700+ credit score

  • 24+ months in business

  • $10,000+ average monthly bank deposits

  • Signed one page funding application

  • 3-5 most recent business bank statements

  • Business tax returns & more

No Collateral Requirements

 

Advantages

  • Government-backed and offer lower APRs and longer repayment periods

  • SBA programs offer both small and large funding amounts for optimal coverage

  • Businesses denied  could qualify

  • With large loan amounts and low SBA loan rates, these small business loans can be ideal for growth initiatives.

 

Disadvantages

  • SBA loan applications are more strict and time-consuming than applications for other term loans or working capital products.

  • The borrower may be required to make a down payment

  • Time to receive funds is slower which means that SBA financing may not be a good fit for certain business needs.