The Top Reason to Apply for an SBA Loan

Loans that are backed by the SBA – Small Business Administration – are known for offering some of the best deals available in small business lending. They are also well known for having rather stringent qualifications along with an extended application process.

SBA loans are not something you should apply for on a whim. You need to expect that the process will last for several months, which does not include the time you must spend gathering and organizing all the needed statements and documents required.

However, if you qualify for the SBA loan and your capital needs are not urgent or immediate, it may be worth going through this process. Keep reading to learn about the benefits offered by applying for SBA loans.

Lower Interest Rates

Your SBA loan’s precise interest rate depends on the SBA program you borrow from, the amount you borrow, and your repayment terms. With that in mind, you are almost guaranteed to receive a very low rate – one that is lower than many other small business lending options.

The loan rates range from 4.39 percent to no more than 13 percent. Again, the rate you receive depends on the loan product you choose.

Generous Repayment Terms

Sometimes, with small business lending, you will find funding options that require weekly or daily loan repayments. This is not the case when you choose an SBA loan. The repayment schedules are always monthly, and they can be extended for several years. This makes them the longest option for small business lending.

Based on the loan you receive, you can have up to seven years to repay your working capital loans, up to 10 years for equipment loans, and as much as 25 years for loans for commercial real estate.

Many Uses and Options

Some types of small business financing will limit how you can use the funds you receive. For example, with equipment financing, you get the funds from lenders who provide the money needed to purchase machinery or equipment.

However, with an SBA loan, you can use the federally backed loan for virtually anything. This makes it a much more flexible and versatile option.

If you are interested in SBA loans, now is the time to consider applying for them. As you can see from the information here, there are more than a few benefits of doing so. Keep this in mind to ensure you get the desired results.

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