An SBA loan is a long-term, low-interest small business loan partly backed by the U.S. government.
Loans may be available up to $350,000!
An SBA loan is a low-interest, government-backed loan, with the longest term and lowest rates available. Repaid monthly, it is available to businesses that have been in business for at least two years. Collateral is required for loans of more than $25,000 in some situations.
An SBA loan is a loan issued by a traditional lender or alternative finance company that is backed by a guarantee from the U.S. Small Business Administration. There are four different types of loan guarantee programs through the SBA: 7(a) loans, CDC 504 loans, microloans and disaster loans. The 7(a) program, which is the option available through Bizfi, represents the bulk of the SBA-backed lending. Because of their federal guarantee, SBA loans are the lowest cost long-term funding available to small businesses. Before the involvement of alternative finance in the SBA market, getting an SBA-guaranteed loan was a lengthy, cumbersome process, which has now been simplified.
Bizfi has streamlined the application process for all kinds of funding. SBA loans, however, have a higher threshold for approval than other types of funding. You must be in business for at least two years and be a U.S. citizen or legal permanent resident. Not every kind of business is eligible; check the SBA’s requirement list before you apply. You must have no bankruptcies in the last three years and no defaults on government-backed loans. Most importantly, your financial statements must show that your cash flow will support the loan’s repayment.
You can use the proceeds of an SBA loan for short- or long-term working capital, including seasonal financing, construction financing and inventory. You can also use it to buy equipment or real estate, or to renovate existing real estate. You cannot use an SBA loan to refinance existing debt or to pay delinquent taxes.