What is an SBA Loan?
Small Business Administration (SBA) loans are business loans guaranteed by the government’s SBA agency to be issued by approved lenders, typically banks. SBA loans are designed to help small businesses maintain financial stability and achieve long-term success.
To support small business development and growth, SBA loans feature affordable interest rates which make them a go-to financing option for small business owners. The SBA loan program allows you to borrow money for business purposes ranging from a desire to boost working capital and equipment purchases.
The Fundamentals of SBA Loans
SBA loans are approved by the federal SBA agency with the aim of helping business owners and entrepreneurs improve their small businesses. The U.S. Small Business Administration agency partners with lenders and provides SBA loan guarantees of up to 85% of the loan amount provided through the lender.
The agency uses federal money to guarantee a larger percentage of the loans extended to small businesses by traditional banks. These banks then have more incentive to lend money to small businesses. Due to the lower risk and incentives associated with SBA loans, financial institutions and other approved lenders are more inclined to provide loans to small business owners.
Who Qualifies for an SBA Loan?
SBA loans are one of the most suitable financing options for small businesses looking to grow. Considering the affordability of SBA loans, almost every small business owner wants to know how to qualify for and acquire an SBA loan.
The most important factor influencing an SBA loan approval is your credit score. It’s important to have a good credit score to hasten the process. Also, when applying for an SBA loan, be prepared to provide the required documents.
Truth be told, SBA loans are not easy to acquire, especially for individuals, which is exactly where Globelend Capital comes in.
At Globelend Capital, we’re dedicated to helping small business owners acquire SBA loans that’ll suit their businesses. We’ve successfully helped numerous small business owners get their SBA loans approved, and we’re confident that we can connect you with a top SBA lender for a quick loan approval.
Benefits of an SBA Loan
Your access to a small business administration loan can be a big turnaround for your business in terms of achieving the financial stability your business requires for long-term success. There are several benefits associated with SBA loans. They include:
Additional funding source:An SBA loan can serve as an additional capital to improve the performance of your small business. If you’re low on working capital, an SBA loan can be a viable option for additional funds.
Large financing amounts:Small business owners can obtain a large amount of money through SBA loan. You can obtain financing for up to 90% of your total project costs through the SBA. Generally, SBA loans are between $5000 and $5 million.
Reasonable terms & conditions:This is the most attractive thing about SBA loans. You can enjoy outstanding terms and conditions such as a low interest rate, low down-payments and a long repayment term through an SBA loan.
Flexibility:Another interesting thing about SBA loan is its flexibility. There are three main SBA loan programs that let small business owners secure a loan for almost any business purpose.
Cons of SBA Loans
A small business administration loan also comes with some drawbacks, which include:
Longer approval time:It can take 2 weeks or more for an SBA loan to be approved. However, we at Globelend Capital strive to help small business owners get their SBA loan approved by top lenders as soon as possible.
A lot of documentation:To get your SBA loan approved, you’ll be required to provide numerous documents. At times, it is stressful to make available all the documents you need for the loan processing.
Collateral:As part of the SBA loan approval, you may be required to pledge an asset as collateral to the loan.
NB: Not all SBA loan lenders require collateral. At Globelend Capital, we’ll connect you with top lenders to get your loan approved without stress or hassle.
How to Apply for an SBA Loan
Many financial institutions offer SBA loans. However, applying for an SBA loan directly from a local bank as an individual can be stressful and make it less likely that the loan will be approved. For a more convenient and effective SBA loan processing and approval, take advantage of Globelend Capital’s service. You can Apply Now” to get connected with top lenders.
Here are the documents required to apply for SBA loan through us:
- Personal financial statement
- Driver’s license
- Business tax returns
- Personal tax returns
- Business certificate or license
- Loan application history
- Balance sheet
- Voided business check
How Much Does an SBA Loan Cost?
The cost of a small business administration loan depends on the program you select. There are three main types of SBA loan program:
7(a) SBA loan program: This program requires a guaranty fee of about 1.7% of the principal amount borrowed for loans up to $150,000, and a fee of 2.25% for a loan of more than $150,000. A 7(a) SBA loan offers loans of up to $5M, a maximum interest rate of 2.75% and a ten-year repayment term.
The Microloan program: A microloan requires no guaranty fee. The program offers up to $50k loans, with interest rates of about 8-13% and a 6-year repayment term.
CDC/504 loan program: A 504 loan requires a guaranty fee of about 3% of the loan. It offers loans up to $5.5M, an interest rate of about 5-6%, and a 10- to 20-year repayment term.
Applying for SBA Loan with GlobeLend Capital
A small-business loan is the best option loan for small business owners looking for funds to improve business performance. At Globelend Capital, we’re committed to helping small business owners acquire an SBA loan easily and conveniently.
If you’ll like to obtain a quick and easy-to-approve SBA loan, APPLY NOW.