What are SBA loans and how are they different from conventional business loans?
The Small Business Administration is not a direct lender. Rather, the SBA offers financing through lending intermediaries–i.e., conventional lending institutions that make loans that are guaranteed by the SBA. SBA loans are targeted to businesses that have unique financing needs not met by conventional business loans. The general types of SBA loans are: 7(a), 504 and SBA Express… > 7(a) loans are for working capital, inventory, purchase of equipment, business acquisition, start-ups and other expansion needs. The loan term is anywhere from 5 to 25 years contingent on the amount and use of the loan. The loan size ranges from $5,000 to $2,000,000. The interest rate is based on prime plus a spread that is adjusted quarterly. This loan has no prepayment penalty. To be eligible, a business must be either in retail, professional or services industries with annual revenues under $25 million; manufacturer, wholesaler and distribution industries annual sales requirement depends on industry. C
