Find out what an SBA loan is why it might be the longest-term, lowest-interest loan available for your small business.
What an SBA Loan Can Do For Your Business
Millions of small businesses take advantage of these long-term, low-interest loans every year. These loans are offered through traditional banks and are backed by the government. This type of financing is available to small businesses when funding is otherwise unavailable on reasonable terms by guaranteeing major portions of the loans made to small businesses. Lendio offers several different SBA loan products from: SBA 7a, SBA 504, and SBA Express.
Loan Amount: $35,000 – $5mm
Loan Term: 25 years
Interest Rate: Prime+
Payment Frequency: Monthly
Time to Funds: 30 days – 90 days
Next Loan Product: Accounts Receivable Financing
When getting an SBA loan be prepared to give a pint of blood with it. This is your standard government red tape loan. There are standard size requirements, financial standing, and you must be in a for-profit industry. The borrower has to meet the SBA’s credit requirements and cannot be able to access other financing options that offer reasonable terms.
What is an SBA Loan?
The U.S. Small Business Administration (SBA) is a federal agency committed to supporting the growth and development of small businesses. The SBA does not personally provide the loans, however, they establish the guidelines for them and then guarantee a percentage of the loan, (in case of default) which minimizes the risk for their lending partners.
The CAPLines program, for loans up to $5 million, is designed to help small businesses meet their short-term and cyclical working capital needs.
The International Trade Loan, for loans up to $5 million offers a 90% guarantee for fixed assets and working capital for businesses that plan to start or continue exporting.
The Business and Industry (B&I) Guaranteed Loan Program helps create jobs and stimulate rural economies by providing financial backing for rural business. Loan proceeds may be used for working capital, machinery and equipment, building and real estate and certain types of debt refinancing.
The FSA “Farm Ownership” loans and “Operating Loans” offer a 90% guarantee on loans up to $1,392,000 (amount adjusted annually based on inflation).
What Types of Businesses Is It Good For?
Lendio offers several types of SBA loans for businesses in almost any for-profit industry. Loan amounts range from $35,000 – $5mm and are available for a wide variety of business purposes.
What are the Minimum Requirements?
The borrower has tried and cannot access capital elsewhere under reasonable terms. Generally, the borrower must have good credit, an accurate business plan, up-to-date financial projections, and not fall under any restricted business industries.
How Much Will an SBA Loan Cost?
SBA loan interest rates are generally prime+, meaning an interest rate banks charge their preferred customers, or those with the highest credit ratings. The cost and repayment structure will also be dependent on the program you choose.
- SBA financing up to 90%.
- Loan terms up to 25 years.
- Fixed and variable rate options.
- Lots of paperwork.
- May require collateral.
- There is a strict acceptance criteria.
Why Use Lendio?
Lendio’s mission is to empower your business by making small business loans simple through options, speed, and trust. Whether you are looking for an acquisition loan or an SBA loan, Lendio offers hundreds of different loan products from a variety of lenders. Finding out which business loan is best for you is why we’re here.
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