The maximum loan amount is $5 million. Loan terms can last up to 25 years for real estate, up to 10 years for equipment (as long as the equipment is likely to stay useful during that time) and usually up to seven years for working capital. Interest rates are also competitive because the SBA limits the interest rate spread that banks are able to offer on the loans. Upside: The SBA guarantee gives banks some comfort room to approve loans or allow borrowers to repay loans over a longer period of time. You might want to consider an SBA loan if you are looking for a loan with a longer term and lower payments — or have loan application barriers related to inadequate collateral or limited operating history. Downside: Even though the SBA has tried to make it better, the time-consuming paperwork and red tape surrounding SBA loans is legendary. You might move mountains and still not prove that you have the cash flow required for a 7(a). One potential solution might be to find a bank participating in the SBA Express program , which promises a 36-hour turnaround in return for only guaranteeing half of a loans value. The maximum loan amount of $350,000 is also a fraction of the 7(a). How to get it: Large U.S. banks such as San Francisco-based Wells Fargo and Minneapolis-based U.S. Bank are also some of the most active SBA lenders . However, it might be worth it to check out local community banks with a focus on business lending. Such banks are a good bet in general for businesses financing because they have more leeway when it comes to approving loans, and their officers can be a wellspring of business financing advice.
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Business Loans: How to get a small business loan.
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Getting Started With a Loan From the Small Business Administration | Entrepreneur.com
But if you take out a personal loan to apply to the business, they you are personally liable to pay back that loan. If you are getting a personal loan that you will want to put towards your business, your credit score will matter. Here is a tutorial on how to get a business loan with bad credit . Pros and cons of getting business loans There are some strong opponents of getting business loans to fund your business.
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