What are Small Business Loans?
The Small Business Administration (SBA) loans are offered by banks, the federal government and credit unions. SBA is a government body that supports small businesses and entrepreneurs. These funds are popular because they enjoy a government-backed guarantee that lends credibility to the business. The lender is assured that even if they default, the government will cover the balance.
These loans can be used to finance;
- Commercial mortgage on real estate
- Purchase new equipment such as supplies, machinery, parts, etc.
- Finance leasehold enhancements
- Refinance existing mortgages
- Start a line of credit
This arrangement benefits both the parties the small businesses and the lenders. For small businesses, it brings capital to further the business while the lenders risk declines as it is backed by SBA.
Period
The current rate of interest is 6.25% – 8.75%, depending on the amount being borrowed.
- The Bank Term Loan terms for 3-10 years here you can borrow $50,000 and more as per the bank’s The time of funding can be between 14-60 days.
- The SBA terms for 5 – 25 years where you can borrow from $10, 000 – 350, 000 for a time of 30 – 90 days.
- The Short-Term online loans term from 3 – 24 months where you can get between $5000 – 250, 000 within 24 – 48 hours.
- The Long – Term Online Loans are 1 – 5 years where you can acquire $5000 – 500, 000 within 48 hours.
- Merchant Cash Advance terms over 3 – 18 months where you can borrow $ 5000 – 500, 000 within 48 hours.
- The Online Invoice Financing factors in individual invoices or a 1-plus yearly contract. You can borrow $100, 000 – 2, 000, 000 within 5 days.
- Equipment Financing terms over 2 – 10 years where you can borrow over $100, 000 – $2, 000, 000 and more within 5 days.
Type
The various SBA Loans are as follows;
- The 7(a) Loan Guarantee Program that is aimed at helping start-ups. These funds of up to $5 million, help them flourish and expand.
- The MicroLoan Program is good for short-term borrowings of up to $50,000. These fund goods purchase, purchase of office furniture, computers, conveyance, etc.
- 504 Fixed Asset Program is a fixed-rate, long-term financing program offering amounts up to $5 million. These are aimed at a business model that benefit their community directly.
- Disaster Assistance is a program that sanctions reasonable loans to the renters or homeowners. The interest is low and can be repaid in the long term. These loans fund the restoration of property after a disaster.
How to qualify for these loans?
Meeting the qualifying terms instills confidence in the lender and borrower for the SBA. There are SBA offices in every state of the USA. While applying inform them about your start-up status, business model and plan. To qualify for these loans, your business should be;
- Be a small business ascribing to the definition of SBA
- Operating for profit
- Be engaged in business in the United States of America
- Maintaining a good business credit report
- Propose to do business in the United States of America
- Have sufficient invested equity
- Have alternate financial resources such as personal assets, before seeking this financial assistance
- Show the need for the loan
- Use the fund for sound business purposes
- Not be delinquent on any debt obligations to the federal government
We also offer lending options for single and multi-tenant office complexes in Phoenix, AZ.