Small businesses and entrepreneurs will want to know about SBA loans, or small business loans granted by the US Small Business Administration.
Here is a simple and informative overview of SBA loans and how they work.
What is an SBA Loan?
An SBA loan is a loan that’s available for small businesses. The most common type of SBA loan is the SBA 7A loan, which is characterized by a low interest rate and a lengthy repayment term.
Applying for a 7A loan might require a few paperwork and requirements but then it’s very desirable for those who need to borrow money with the least possible risk. Furthermore, you can use it on supplies, equipment, capital or for expanding your business.
SBA Loan Types
SBA 7A loans consist of seven unique loan types, with each one catering to a certain business’ needs.
If you’re looking for a more robust loan to purchase large equipment, then you might want to apply for an SBA 504 loan.
The main differences between the 7 loans are the loan amount, usage for the funding and turnaround time. It’s worthy to note that you will need to provide collateral on an SBA 7a loan that’s greater than $25k.
The standard turnaround time for an SBA loan is somewhere around 7 to 10 business days.
Should You Apply For an SBA Loan?
SBA loans are programs designed by the US government to help small business owners. It offers several advantages over traditional bank loans, such as a more flexible repayment term and lower interest rates across the board.
If your business is in need of a reinvigoration, restructuring or expansion then it’s a good idea to consider applying for one. However, you will still need to procure the necessary paperwork and find a good 7a lender, particularly those that have experience with a 7a business loan.
Angela is a senior editor at Dreniq News. She has written for many famous news agencies.