Why an SBA Loan?
An SBA Loan is a small business loan made by a lender that is in turn guaranteed by the U.S. Small Business Administration. The existence of the SBA’s guarantee is an inducement for the bank to make loans it would otherwise not make. This is because if the borrower defaults on the loan, the SBA will reimburse the bank for a percentage of the loan loss. Most businesses find the bank’s vault door opens a little wider when requesting an SBA loan. Although the maximum SBA Guarantee to the bank is limited to $750,000, SBA loan sizes can vary widely from $5,000 to $2,000,000. • Longer terms than most conventional loans • Lower owners equity requirements than other loans • Competitive interest rates, often lower than market rates • Time for processing loan is same as most conventional one 30 to 60 days Loan Programs 7(a) • The most common SBA program is generally prime plus .5 to 2.75% • Loan amounts up to $2,000,000 • Proceeds can be used for a variety of business purposes 504 • Acquisition
