One option to finance your small business is with a Small Business Administration 7(a) loan. This type of government guaranteed loan is popular because it allows lenders to offer low interest rates and flexible terms. Lenders fund the SBA loan and the federal agency guarantees a portion. The Small Business Administration (SBA) can guarantee up to 85% of loans that are $150K or less and 75% of loans more than $150K. This type of loan is a great option when you want to hire more employees, open a new location, or refinance an existing loan. This federally backed loan is more manageable for borrowers than other types of financing because lenders can offer lower monthly payments and longer terms for repayment. With a non-SBA loan, you will have a shorter time period to repay the loan and high interest rates with hard money lenders. The SBA requires the owner(s) with 20% or more ownership to personally guarantee the loan.
How long is the term for a SBA loan?
The loan terms depends on how you are using the funds. Typically, working capital or daily operations will be 7 years. For new equipment purchases the SBA term will be 10 years, while real estate purchases will be up to 25 years.
Can I get a SBA loan?
For your added convenience, we have added a SBA QuickCheck on our home page to quickly let you know if your project is eligible for a SBA loan!