Small Business Administration(SBA)
SBA loans are small-business loans guaranteed by the SBA and issued by participating lenders, mostly banks.
The SBA can guarantee up to 85% of loans of $150,000 or less and 75% of loans of more than $150,000. The agency says its average loan amount was about $375,000 in 2016. The program’s maximum loan amount is $5 million.
If you’re looking to open a new location, hire employees or refinance an existing loan, SBA loans are a great option. SBA loan rates and terms typically are more manageable for borrowers than other types of financing
In keeping with SBA rules, participating lenders set their interest rates based on the prime rate plus a markup rate known as the spread.
If your loan is more than $50,000 and the term is shorter than seven years, your rate is based on the prime rate with a maximum spread of 2.25 percentage points. As of December 2017, that meant a maximum interest rate of 6.75%.
If your loan is more than $50,000 and the term is seven years or more, the maximum spread is 2.75 percentage points. As of December 2017, the maximum interest rate was 7.25%.
Note that the APR on a loan differs from the interest rate. The APR is a percentage that includes all loan fees in addition to the interest rate.
In contrast, major online small-business lenders that don’t do SBA loans offer financing with APRs that can be as high as the triple digits.
In addition to the low APRs, another perk of SBA loans is that you get more time to repay them than you would get on non-SBA forms of lending from banks or online lenders.
The loan term depends on how you plan to use the money, according to the SBA:
- Working capital or daily operations: seven years
- New equipment purchases: 10 years
- Real estate purchases: up to 25 years
For SBA loans, a longer term means a lower interest rate and lower regular payments. That means you’ll have more money available for other business needs. SBA loans also can provide a way out of a damaging financial situation.
Get consulting on a SBA loans by filling the form on the right or call us at (844)804-3511.
- YTD Profit and Loss (P&L) Statement
- YTD Balance Sheet
- Projected Financials (1-3 years)
- Proof of Ownership
- Business Certificate/License
- Loan Application History
- Business Tax Returns (last 2 years)
- Personal Tax Returns (last 2 years)
- Personal Financial Statement
- Owner Résumés
- Business Overview and History
- Business Lease
- 3 months to 18 months
Funds sent to borrower’ bank account in
- 6 months to 18 months.
*The information provided is under ideal condition and may change based upon business portfolio and circumstantial needs.