SBA loans are known for providing businesses with some of the best loan terms and interest rates seen in the world of business lending. This is because the Small Business Administration backs theses loans, but this also means that they could be a little bit more difficult to get your hands on.
As far as the amount that can be lent with these types of loans, they can range from the lower end all the way up to $5M. This can be used to fund working capital, real estate, and even the purchase of new equipment to take your business to the next level.
The Basics of How SBA Loans Work
The terms and options that are available with this type of business loan depends upon what banks are willing to work with you as well as your business itself. Loan amounts can vary anywhere from $500 to $5,000,000 dependent on what it’s needed for as well as your business’s ability to pay it back.
The best part of going this route to obtain funding for your business is the repayment terms being more flexible and the interest rates being lower. You can get your interest as low as 6.5% and terms can range anywhere from 5-25 years.
The Benefits of SBA Loans
This form of business financing didn’t get its reputation for being one of the best routes for businesses of all sizes by providing minimal benefits. In fact, we listed some of the top ones for you below.
· Embrace flexibility when it comes to what you can use the loan for.
A lot of the time certain business loans are strict when it comes to what you can use the money for that your bank or lender gives you. When you’re dealing with loans back by the Small Business Administration, they have a more flexible approach which doesn’t limit possibilities.
· Not only do they have the lowest interest, down payments can be lower too.
With any kind of loan for your business, odds are that you will have to come up with a down payment to secure it. While SBA loans do often come with this requirement, it’s usually minimal in comparison to the other options on the market.
· Unlock SBA resources that could provide you with a priceless and lasting opportunity.
A common misconception is that the SBA is in the loan business, but they’re really in the business of helping business start and flourish. With that said, you’ll receive access to a lot of resources and networks that the SBA has to offer companies like yours.
Often this is one of the first types of funding that you should consider for your business. It has the potential to open a lot of doors in the future while minimizing the cost of obtaining it.