SBA Small Business Loans
Small Business Loans (SBA)
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Small business loans are sponsored by a government agency known as the Small Business Administration (SBA)
The Small Business Administration (SBA) offers small business owners government guaranteed loans that are easier to obtain than a typical bank loan. Depending on how long a business has been established and the quality of the borrower's credit, non secured loans are available. Newer businesses will usually be required to provide collateral for the loan.
The Small Business Administration (SBA) offers the following types of loans.
Unsecured Credit Lines
A simple line of credit that is offered by banks and private lenders under the guarantee of the SBA. Rates will vary greatly so it is important to shop for a suitable lender with the best rate. Good credit and an established business are prerequisites for this type of loan.
Lines of Credit
Lines of credit are especially desirable for businesses that have seasonal cash flow issues or need funds on a short term basis for such things as purchase of inventory.
Interest rates on lines of credit are usually pegged to prime rate and can be volatile during periods of rising interest rates. Interest is only charged on the amount of funds outstanding.
Short Term Loans
Short term loans are usually three years or less in duration and are paid back in the same manner an auto loan would be paid. That means you will have monthly payments to make on this loan. These loans require collateral which my be in the form of land or other assets such as equipment.
Long Term Loans
Loans longer than three years are available for equipment or other asset purchases. These loans often contain interest rate adjustment provisions as well as prepayment penalties.