Financing is key to any business, but funds are not always easy to come by. Fortunately, small business owners have an ace up their sleeve: SBA loans, a convenient and flexible financing solution that makes it easy for you to maintain or grow your business.
Keep reading to learn more about SBA loans: What they are, how they work, and how to get one.
What Are SBA Loans?
SBA loans are small-business loans partially guaranteed by the US government through the Small Business Administration (SBA), a federal agency dedicated to helping Americans start, build, and grow businesses.
These loans can be short-term or long-term and can be used for a variety of purposes, including purchasing equipment or real estate.
How Do They Work?
While these loans are guaranteed by the government, borrowers still need to apply to a lending institution, which submits the application to the SBA for review. If the SBA determines that the business is eligible, then it guarantees the loan.
Having the guarantee of the US government translates into tangible benefits for business owners:
- These loans usually have less stringent requirements than traditional bank loans.
- Down payments also tend to be lower in comparison to other loans.
- SBA options offer longer terms than traditional bank loans.
What Are the Most Popular Options?
When it comes to loans with the backing of the SBA, there are two options: 7(a) loans and 504 loans. These are the most important differences between them:
- 7(a) loans: Capped at $5 million, with terms that range from 5 to 25 years depending on the purpose of the loan (real estate, equipment acquisition, working capital, etc.), and a minimum down payment of 10%.
- 504 loans: +$20 million, with terms of 20-25 years (for commercial real estate) or 10 years (for equipment) and a 10% down payment.
If you have trouble figuring out the loan that works for your business, don’t worry. Our experts at Jellyfish Commercial are here to help you make sense of the options available to you. We can even design a financing solution customized to your needs!
Gellyfish: Certainty of Execution in Financing
Looking for financing alternatives in California? Gellyfish is here to help. We offer financing with the certainty of execution you need to take your business to the next level.
Contact us today by email (info@gellyfishcommercial.com), telephone (877-800-4493), or social media (Facebook, Twitter, LinkedIn), to schedule a free consultation or to learn more about our full range of financing options.
