The United States Small Business Administration (SBA) was created specifically to help the nation’s small businesses. One of the agency’s key missions is to help American small businesses get the funding they need to keep the country moving forward.
The SBA doesn’t actually provide SBA loans—it’s a federal agency, not a bank. However, the SBA does guarantee a portion of the loans, which is why they are so sought after. It also establishes guidelines for the lenders and the loans, so you don’t have to worry about getting involved with any shady characters.
Because the application process is robust and the government backs the loan, lenders generally provide very good terms.
The SBA will back different loan products depending on your business’s situation. The most popular loan is the SBA 7(a) loan, which can range in amounts from $50,000 to $5 million. The interest rate for these is “Prime+”; the SBA sets the rate, but it changes. Depending on the length of the term, expect a rate around 6% to 9%. This particular SBA loan is approved very quickly—sometimes in just 24 hours.
The repayment period can be as long as 25 years, which is great if you need a lot of time to pay off a big expansion without worrying about steep loan payments every month.
With this funding, you can buy needed real estate, refinance existing debt, buy business materials, and more. Whatever your small business needs, there is probably an SBA loan for you in just the amount you require.