What is SBA Lending?
The Small Business Administration (SBA) is an Agency of the United States Government authorized to provide business loans to American Small Businesses. SBA loans are actually underwritten and offered by regulated banks, credit unions or community-based lenders that meet the SBA’s criteria. The SBA provides the actual lender with a guaranty from 50%-90% of the loan amount to reduce the lender’s risk of default by the borrower, thereby increasing access to financing for small businesses. The SBA has a variety of loan programs which are distinguished by their different uses of the loan proceeds, their dollar amounts and the requirements placed upon both the borrow and the lender. The most common SBA programs are the 7(a) Loan Program and the Certified Development Company or 504 Loan Program.
What are the Benefits?
- Funding amounts up to $5,000,000
- Low Interest – Interest Rates Controlled by SBA Program Mandates
- Long-Term Funding: Maximum of 25 years for Real Estate; up to 10 years for Equipment, up to 7 years for Working Capital
- Government Backed Provides Access to Financing Otherwise Not Available