When looking for the best funding deal, SBA loans are, hands down, the best of them all with the average APR ranging from 7.21% to 8.44% and loan amounts from $30,000 up to $350,000 with no pre-payment penalty.
What are SBA loans? they are business loans from any financial institution participating in SBA backed programs (Small Business Administration). The SBA federal agency, that helps small businesses and entrepreneurs, guarantees these financial institutions a percentage of the loan in order to encourage them to provide and enable this type of loan.
Why an SBA Loan?
To make it simply, an SBA loan is a long-term, low-interest small business loan partially guaranteed by the government. You can use an SBA Loan for several business purposes including working capital, inventory, equipment, debt refinancing, purchasing real estate or even business acquisition.
Once an application is completed and approved, you can expect your funds in your bank account in as fast as 7 days after your application is complete. All SBA loans come 4% referral and packaging fees plus closing cost and a SBA guarantee fee of 2.25% for loans above $151,000.
Even though SBA loans take longer than other types of business loans and requires more paperwork, there are still – by far – the most beneficial loan since it offers longer terms and lower APRs. The following are the requirements for an SBA Loan:
- Minimum 600+ personal FICO score.
- No bankruptcies or foreclosures in past 3 years.
- Company in business for at least 2 years.
- Cash flow to support loan payments