For the establishment or extension of the small business in America, funding is required. small business administration is the federal body that provides financial support to such businesses in America by giving partial guarantees. This small business loan is given by both banks and online lenders and is considered one of the best small business loans. You can avail of finance for your business by fulfilling the requirements of the SBA loan easily. SBA-backed loans are always a smart option and are much preferable to conventional bank loans.
Features of SBA loans
- In comparison to traditional bank loans, there is a high chance of getting your loan approved because it is guaranteed by the government (SBA).
- You need not worry even if you don’t have any assets to keep as collateral because various SBA loans don’t require any collateral.
- The requirements for getting a loan are very flexible. One can borrow it even if they don’t have a good credit score and for a wider range of business purposes.
- The interest rate is also much lower than traditional bank loans.
- The debtors are given ample time for the repayment of the SBA loans, unlike traditional bank loans.
- The amount of SBA Loan varies based on its types but it generally offers the benefit of the large loan amounts.
Various types of the SBA Bank loans
There are total 9 types of SBA Loans available and each of them has different purposes and benefits
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SBA 7(a) loans
It gives loans up to $5 million for general business needs. The best thing about this SBA loan type is its super long repayment time. Other than that, it is flexible and is ideal for a range of applications such as business expansion, equipment purchase, working capital or property acquisitions etc.
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SBA Express loans
The maximum loan amount that a business person can take from SBA Express is $350,000. Enterpreneurs can prefer this loan for its expedient approval process if they have a good credit history.
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SBA 504 Loans
The range of SBA 504 loans is from $125,000 to $20 million. This SBA loan is preferred especially for business expansion, renovation and construction of new projects.
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SBA Microloans
The maximum loan size of the SBA microloans is $50,000 and is suitable for the small funding needs of small businesses.
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SBA Disaster loans
Sometimes, businesses suffer a huge loss due to disasters and the fund is required immediately for the repair and replacement of the business assets. The purpose of this loan is to provide relief from such a disaster to small businesses. it offers a maximum loan of up to $2 million.
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SBA Community Advantage loans
The maximum loan size of the SBA community advantage is $350,000 and its purpose is to support businesses in underserved markets. It assists the businesses financially in catering to various needs such as purchasing new equipment, investing in the property, expansion and growth and meeting operational expenses.
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SBA Export Working Capital loans
The main purpose of this loan is to support business in the international trade and it offers amounts up to $5 million.
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SBA Export Express Loans
Entrepreneurs who want quick funding for export operations and want to seize international business opportunities can refer to this SBA Loan due to its quick approval and short-term arrangements. It offers loan amounts up to $500,000.
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SBA international trade loans
As its name suggests, it supports businesses in international trade and promotes global competitiveness. The maximum amount that one can take under this loan is $ 5 million.