The Benefits of SBA Loans That Every Small Business Needs to Learn
There are many types of business loans available for large companies and big businesses, but when it comes to smaller businesses, there are few that can compare with SBA loans. A Small Business Administration loan may not be right for every type of business, but when the fit is correct, the benefits can provide a great advantage.
Access to Available Funds
Finding capital for your small business can be problematic since the last recession. Lenders can be reluctant to loan money to untried or unproven brands, and if any risk is involved, most financing opportunities can quickly disappear. Loans through the SBA program can allow your young company access to large amounts of money.
Lowest Interest Rates Around
Interest rates on loans through the SBA are some of the lowest available. Depending on your business’ credit history, operating past, and other qualifications, the interest could be as low as 6.75 percent on a 7(a) or 504 loan. Another advantage is the fact it is a fixed interest rate, so you will never have to worry about interest rate growth.
Advantages of Flexibility
Sometimes your business needs an influx of money for a boost in a dozen different areas all at once and taking out a loan that lists specifics on how to use the money can be frustrating. When you need working capital, it can be difficult to know when an emergency may come up and require an inventory infusion or equipment replacement. With SBA loans, the flexibility to use the money within certain terms you set can be one more thing you do not have to stress over.
Shrinking Down Payments
Many lenders require businesses to provide a down payment, and this is often true of the SBA type loans. However, when you take out a Small Business Administration loan, the amount of down payment required can range from nothing at all for the microloan, up to 20 percent for the 7(a) or 504 loans. Other lenders often ask for a 30 percent down payment.
Easy Loan Repayment Terms
Ease of repayment is another advantage when it comes to SBA loans because the programs offer long repayment options that allow you to set terms to fit your company’s needs. Whether you require a short-term loan for six months, a long-term loan for 25 years or money for a length of time somewhere in between, the Small Business Administration has a loan to fit your needs.
When you need a business loan, check out what the Small Business Administration has to offer. You may be surprised at how flexible the loan terms are and how low the interest rates can be.