What are SBA Loans?

Are you currently a small business owner interested in renovating or buying commercial real estate in order to further expand your business? If so, you may want to consider financing this endeavor with an SBA loan. A Small Business Administration (or SBA) loan has beneficial terms and rates and is partly backed by the U.S. government. If you are interested in boosting your business in Conyers, Georgia, the experts at Preferred Capital Funding can help. Continue reading to learn more about how an SBA loan can help improve your business.

How Do SBA Loans Work?

SBA loans are designed to help small businesses, and are partially backed by the government. They can be used to refinance an existing loan or help open up a new business location. Since SBA loans are insured  by a federal agency, they pose less risk to lenders because if a borrower is unable to make a mortgage payment, the SBA will back part of the loan. This also allows SBA loans to offer more flexible terms and low interest rates. It is important to note that since SBA loans have a connection to the government, loan qualifications can be stricter and the application process can take a longer amount of time.

What Are the Benefits Of An SBA Loan?

SBA loans can be an excellent way to help finance your business, and they offer several benefits, including favorable, capped interest rates and longer repayment terms. SBA down payment amounts also are lower than that of traditional loans, and there are a variety of SBA loan types available so you can help find financing that best suits your type of business. You may also be able to finance up to 80 to 90 percent of your projected cost with this type of loan.

Qualifying For An SBA Loan

SBA loan lenders tend to seek businesses with a proven success record that demonstrate the capability of affording the mortgage payments. Typical SBA loan requirements include:

• An adequate amount of equity built up in the business
• A minimum credit score between 620-640
• In order to be eligible, the business must be classified as for-profit and based within the United States
• The ability of the borrower to prove that the business is financially stable
• The business to be at least two years or older; the longer your business has been in operation, the more likely you are to obtain loan approval
• The business must meet the SBA standards of small business classification

Enhance Your Business With An SBA Loan

If you are interested in purchasing or revamping your business in Conyers, Georgia with an SBA loan, Preferred Capital Funding is here to help. Contact our office today for a consultation.