SBA loans are a powerful resource for small businesses, providing financial support backed by the Small Business Administration (SBA) through approved lenders, mainly banks. The SBA guarantees up to 85% of loans for amounts up to $150,000, and 75% for loans above that, making it easier for businesses to secure the funding they need. Currently, the average SBA loan amount is around $375,000, with a maximum limit of $5 million.
If you’re looking to expand your business, hire new employees, or refinance existing debt, an SBA loan is a great option. These loans usually come with lower rates and more favorable terms than other financing types, offering affordable solutions for small business owners.
SBA lenders set interest rates based on the prime rate, adding a small margin known as a "spread" to determine the final rate. For loans over $50,000 with terms shorter than seven years, the maximum spread is 2.25 percentage points. As of October 2024, this results in a maximum interest rate of about 10.75%. For loans over $50,000 with terms of seven years or more, the spread can be up to 2.75 percentage points, bringing the maximum rate to 11.25%.
It’s important to remember that the Annual Percentage Rate (APR) includes all loan fees in addition to the interest rate. In comparison, many online small-business lenders offer loans with APRs that can reach triple digits.
One of the advantages of SBA loans is their longer repayment terms, which are often more generous than what you’d find with other loans from traditional or online lenders. Loan terms depend on how you plan to use the funds:
Working capital or daily operations: Up to 7 years
New equipment purchases: Up to 10 years
Real estate purchases: Up to 25 years
Longer terms with SBA loans mean lower interest rates and smaller monthly payments, giving you more flexibility to invest in other areas of your business. An SBA loan can also be a lifeline if your business is facing financial difficulties, providing a way to regain stability.
For expert advice on SBA loans, fill out the application form or call us at (844) 804-3511. We're here to support your business growth with confidence.
*The information provided is under ideal condition and may change based upon business portfolio and circumstantial needs.
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Apply now for a business line of credit by filling the form on the Above call us at (844)804-3511 Prosperum Fund will help you secure a line of credit based on your business profile.
Documents required*:
Business registration details Business bank statement of 3 to 6 months
Approval timeline:
2 hours to 48 hours Funds sent to borrower’ bank account in Less than 24 hours to 3 days.