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What is a SBA Loan?
A Small Business Administration Loan (“SBA Loan”) is a small business loan program administered by the Small Business Administration and is partially guaranteed by the government. This program works with other financial institutions to help give small businesses access to working capital that has longer terms and lower interest rates. Most businesses seeking working capital to purchase inventory, operate or expand a business can benefit from a SBA Loan.
Why should a business apply for an SBA loan?
Many companies have business needs such as expanding in technology or location, payroll needs, new marketing endeavors, which require access to working capital that have longer terms and lower interest rates. SBA Loan amounts typically range from $500 to $5.5 million dollars upon approval. Due to the fact that an SBA Loan is partially guaranteed by the government, it helps reduce the lender’s risks, which allows for the lower rates and longer terms.
SBA Loan Details
ADVANTAGES
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Broad eligibility requirements
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Capped interest rates
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Small and large loan amounts offered
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Businesses typically not approved for traditional loans could qualify
DISADVANTAGES
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Borrowers typically must make a down payment
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Collateral could be required
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Slow approval process
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Low-credit applicants generally not approved
Qualification Criteria
With great interest rates, federally-backed SBA loans are considered the gold standard in small business lending. Here are some factors the SBA considers:
650+ credit score
24+ months in business
No current federal tax liens
Documentation Required
We at GRL Capital Partners want to make the funding process as efficient and simple as possible for you. Therefore, minimal documentation is needed for your application:
Signed one page funding application
3-5 most recent months company bank statements
Business mortgage statement (if you own); business lease agreement (if you rent)
