One of the most important things you need for a small business is capital. There are many ways to initially fund your small business, including loans from banks, friends and family, or credit cards. However, you can also look into SBA loans.
The small business administration, or SBA, was created in the 1950s, and it is a government agency that provides money, counseling, and contract expertise for entrepreneurs. There are many things that small business owners can get from the SBA, but loans are one of the most well-known offerings.
The biggest draw of SBA loans is the low-interest rates. SBA loans have some of the best interest rates, fixed or variable. The interest rate on loans over $50,000 is 2.75%. This means that you will get a lower interest rate than you would with a standard business loan.
The SBA also offers flexible payment options, especially for disaster relief loans. In some cases, companies can defer SBA loan payments, refinance the loan, or schedule interest-only payments. These options are highly specific to certain situations.
Finally, SBA loans have easier qualifications and longer terms. Conventional loans require an excellent to good credit score, but the SBA has lower credit score requirements. This is why they tend to be a good option for new businesses and other companies that may not qualify for a typical bank loan. They also offer longer terms. For real estate purchases, the loan can be up to 25 years. The loan can be up to 10 years for shorter-term assets, such as equipment, instead of 3 to 5 years.
If you are starting a new business or have encountered financial hardships, an SBA loan can benefit your business. If you are in the Denver area, you can contact Aspen commercial lending to learn more about SBA loans.