The Small Business Administration does not actually loan money. Instead, it serves as a type of partial-repayment cosigner, which is why collateral is typically needed to acquire a SBA loan.
SBA loans are used for different purposes. While most people associate a business loan with start-up capital,
SBA loans serve more purposes. For instance, funds can be used to refinance expensive debt, purchase equipment and/or inventory, expansion, or even to buy real estate.
Here are some more things you need to know about SBA loans:
There are 6 types of SBA loans:
1. SBA 7(a) Loans
SBA 7(a) loans are the most common type of SBA loan. These loans of up to $5,000,000 can be used for working capital, to refinance debt, or to buy a business, real estate, or equipment.
The SBA 7(a) program includes the SBA Express Loans and SBA Advantage Loans.
2. CDC / SBA 504 Loans
CDC / SBA 504 loans combine a loan from a nonprofit CDC with a loan from a bank to create a long term, low interest rate loan for up to $20,000,000 for the purchase of owner occupied commercial real estate and heavy equipment.
3. SBA CAP Lines of Credit
CAPLines are SBA lines of credit meant to help small businesses meet short-term and seasonal working capital needs. The SBA offers 5 types of these lines of credit.
They can be fixed or revolving, have a max term of 5 years, and otherwise adhere to SBA 7(a) rules.
4. SBA Export Loans
Export loans are designed to help small businesses fund new exporting operations and offer cash flow solutions to small business so they can be more flexible with the terms they offer their international customers.
5. SBA Microloan Program
Microloans are up to $50,000 with up to 6-year terms.They have higher interest rates (8% -13%) than most other SBA loans.
The SBA issues Microloans through nonprofit, community-based organizations. Microloans cannot be used to refinance debt or purchase real estate.
6. SBA Disaster Loans
Disaster loans are available to small businesses and organizations that are located in a declared disaster zone and suffered damage to property, businesses that incurred economic losses because of a disaster, and businesses that lose a key employee who is a military member and is called to active duty.
Winston Rowe & Associates was formed in 2011 with a core focus on flexibility. They really want to be able to find a way to help everyone who comes to them find a funding solution that meets their needs.
The best funding solutions occur when they combine data with consultation and common sense.
That’s why Winston Rowe & Associates actually wants to speak with clients, so we can truly understand your business and its distinct needs.
They have access to a full spectrum of capital sources to meet almost every commercial real estate financing solution.
You can check them out on line at http://www.winstonrowe.com or give them a call at 248-246-2243