SBA LOANS

These loans are guaranteed by the Small Business Administration (SBA) and as a result offer some of the lowest rates on the market, as well as long repayment terms and the ability to borrow up to $5 million. Repayment ranges from 7- 25 years based upon how you plan to use the money. SBA loans are best for strong credit borrowers who have been operating for a minimum of 2 years and are willing to work with a longer application process. There are several types of SBA loans: The SBA 7(a) loan, 504, microloans, and EIDL disaster loans, to name a few. The COVID-19 pandemic has resulted in increased options for SBA-backed financing, including the government’s CARES Act and Paycheck Protection Program (PPP).

Pros:

Lowest rates on the market
Borrow as much as $5 million
Longer repayment terms 7-25 years

Cons:

Longer application process
Additional documentation and qualifications required

Best for:

Expanding businesses, or refinancing debt
Businesses with good credit and having the ability to wait a little longer for funding

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How do you qualify for an SBA loan?

There are some basic qualifying criteria for an SBA loan, which includes:

Be a for-profit business
Meet the SBA’s size definition of a small business, which is defined by industry. Generally, a small business will have fewer than 1,500 employees and revenue under $38.5 million
Be located and do business in the United States
Have equity, sweat equity or a combination of both invested in your business
You are not seeking funding elsewhere while simultaneously pursuing an SBA loan