Why You Should Apply For an SBA Loan

It's important to know that the Small Business Administration does not make loans on its own. It's job is to guarantee a percentage of the loan, so the lending partners do not take on any risk. In order to ensure the Small Business Administration does not lose billions of dollars, the federal agency has specific criteria that every business owner must meet in order to qualify for an SBA loan.

These requirements include size, financial standing, and status as a for-profit company. Additionally, the SBA does not guarantee loans for small businesses that have access to other reasonable financing. However, a small business must still meet specific credit requirements in order to qualify.

There are five types of SBA loans for businesses and loans range from $25,000 to more than $2 million dollars. They can be used for commercial real estate purchases, new construction or renovation, debt refinancing, business expansion or business acquisition,, and debt refinancing.

There are a number of advantages small business owners can have with an SBA loan. They can benefit from lower down payments and longer repayment terms, so small businesses can take advantage of having more cash flow for operational expenses and spend less money to pay back their loans. They can enjoy up to 90% refinancing and terms up to 25 years. There are no balloon payments and loans can have fixed and variable rate options.

Just as you would choose a bank with the best deposit rates, you can work with your lender to find the best loan rates. You should shop around among lenders to see who can work with you and offer you the best services and options to make your lending experience a quality one.