From SBA loans to conventional loans, making sense of the world of commercial loans can make your head spin. If you find yourself wondering which type of commercial loan makes sense for you, wonder no more—this quick guide will answer all your questions, and then some.
When to Choose an SBA 504 Loan
SBA loans are loans guaranteed by the Small Business Administration, a government agency whose stated goal is to help American small business owners start and grow their business.
The two most popular SBA lending programs are known as 504 loans and 7(a) loans. You should choose a 504 loan if you need to do any of the following:
- Purchase existing buildings or land
- Purchase new facilities
- Purchase long-term machinery or equipment
- Improve or modernize existing facilities
When to Choose an SBA 7(a) Loan
Like 504 loans, 7(a) loans are a type of SBA loans. These loans are particularly convenient because they usually offer lower interest rates and feature less stringent requirements compared to conventional loans.
Choose a 7(a) loan if you are looking to use your commercial loan for the following purposes:
- A business purchase that involves real estate
- Short- and long-term working capital
- Refinance current business debt
- Purchase furniture, fixtures, and supplies
When to Choose a Conventional Loan
No doubt, SBA commercial loans are really convenient. However, as you might have noticed from the descriptions above, they come with strings attached. In other words, there are very specific requirements about how to use the money from an SBA loan. If you are looking for more flexibility, then a conventional loan is probably the solution that makes sense for you.
When to Choose a Bridge Loan
As the name suggests, bridge loans are stopgap solutions meant to be used while you secure permanent financing. Bridge loans are commonly used in real estate transactions, for example, when a homeowner wants to buy a new property before selling the one they have currently. They are also commonly used by investors who want to improve assets of finance the operation of a business while they secure long-time financing.
Gellyfish: Certainty of Execution in Commercial Loans
Looking for commercial loans? Gellyfish is here to help. We offer 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.
