Which SBA Loans Are Available?
There are many types of SBA loans. The most common are the 7a loans. 7a loans include small, express, international trade, standard, CAPlines, export express and export working capital. The SBA also provides microloans, which are loans of up to $50,000. The SBA also started to issue loans to businesses that suffered because of the pandemic. These loans are called Economic Injury Disaster Loans. They were created to help businesses to pay their employees and keep their establishments afloat during times when other businesses may have had to close because of the pandemic. According to Lantern Credit, the SBA offers many opportunities to businesses. You may be eligible for an advance that will push your business forward, as well.
How Can You Use SBA Loans?
The SBA intends for its loans to be used for businesses. That being said, you can use them for any aspect of running a business. You can use them to purchase equipment or a building to run your business from. You can also use such loans to pay your payroll during a time of crisis. Business expansion is another reason you may want to borrow a loan from the SBA. You can use the money to build another part of your existing building or to rent an entirely new building.
What Are Interest Rates Like?
Different loans have different interest rates. The loans with the highest rates are usually microloans. Their interest rates can be between 8 and 14 percent. Economic Injury Disaster Loans have a 4 percent interest rate. The 504 category of loans has interest rates that are fixed throughout the loan’s life. The 7a loan interest rates depend on the daily peg rate and the type of loan borrowed. You can speak to a specialist to obtain more information about the daily peg rates and what they would mean for your loan.
How Long Do You Have to Repay SBA Loans?
The repayment terms vary from five years to 30 years. The payback time depends on what you’re going to use the loan for. The new economic disaster loans have a 30-year repayment period. Working capital loans generally have a 10 year repayment period, and real estate advances usually have a 25-year repayment period. If you’re going to use your loan to pay for equipment, then the loan period will not go past the equipment’s life. You will most likely have a 10-year repayment period to return the funds that you’ve borrowed from the SBA. SBA loans usually give you a generous amount of time to pay them back once your business starts making good profits.
Now you know a little bit about SBA loans and how they can help you. You can apply for an SBA loan at any time. Perhaps, you’ll receive an advance to start your new business venture.
Founder Dinis Guarda
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