When you consider financing alternatives, one of the main variables you need to assess is the term of the loan. So, if you are thinking about taking out an SBA loan, chances are good that you are asking yourself: “How long are SBA loans?” Well, you’ve come to the right place: read on to find out!
How Long Are SBA Loans?
The technical term to refer to the length of a loan is “maturity.” When it comes to SBA loans, loan maturity is determined by factors such as:
- Purpose of the loan
- The useful life of the assets you want to finance
- Your ability to repay the loan
So, for example, if you intend to use the proceeds of an SBA loan to purchase a fixed asset such as a property or heavy equipment, the maturity of the loan will be longer compared to SBA loans used for working capital or to purchase fixtures.
As a rule of thumb, SBA divides the maturity of their loans into three categories:
- 25 years for real estate
- 10 years for equipment
- 10 years of working capital or inventory
For personalized information, be sure to contact our experts at Gellyfish Commercial. We’ll be glad to answer all your questions and help you make sense of your financing options.
How Do SBA Loans Work, Exactly?
SBA loans are business loans partially guaranteed by the Small Business Administration (SBA), a government agency created to help Americans start and grow businesses.
This is important because, as you might imagine, having the backing of the U.S. government can make things a lot easier for any entrepreneur.
However, it’s worth keeping in mind that when you take out a loan from the SBA you are not getting money from the government.
The SBA only guarantees the loan, mitigating the risks lenders face and making it easier for entrepreneurs to gain access to capital.
Gellyfish: Certainty of Execution in Business Financing
At Gellyfish Commercial, we offer equipment financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (info@gellyfishcommercial.com), telephone (877-800-4493), social media (Facebook, Twitter, LinkedIn), or through the live chat on our home page to schedule a free consultation.
