But, in addition, the sky’s the limit when you qualify for this funding. One of the most common loans, the SBA 7(a), is a flexible, low-interest payment loan. Here’s what’s available, along with a basic overview of each. Types of SBA Loans for a New Businessĭepending on your type of business, there’s probably an SBA loan for you. SBA loans come with a fair amount of paperwork, including an application that requires significant documentation regarding your finances. Qualifying for an SBA loan is much easier than a conventional one if you’re a new business. For example, some loans, specifically commercial real estate, can carry a 25-year repayment term. Longer Repayment Termsĭepending on the type of SBA loan, longer repayment terms are another reason they’re so attractive. Unlike conventional loans, SBA loans are more lenient and adjustable in their repayment alternatives giving newer businesses the time to increase their bottom line and consistently produce payments. Flexible PaymentĪnother benefit of using SBA loans for startup businesses is its flexible payment options. The interest rate is based on the daily prime rate, which is dependent upon Federal Reserve actions. That’s because the SBA sets the rates for lenders, which keeps costs low. Small Business Administration start-up loans typically come with lower interest rates than conventional ones. Securing an SBA loan to start a business comes with a myriad of advantages.
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