Are you a small business owner in need of funds to grow your business? An SBA loan is the best bet for qualified entrepreneurs.
Here are 7 great reasons you should explore an SBA loan to help your business flourish.
Funds Fuel Growth
Funds from an SBA loan can be used for a variety of purposes to fuel small business growth. According to a March 2016 SmartBiz customer survey, 77% of borrowers used loan proceeds for Working Capital. Another popular category was to use funds to reach more customers - 42% of survey respondents are using their SBA loan proceeds for marketing. Other popular uses for SBA loan funds are for equipment purchases, refinancing existing high interest debt and hiring new employees.
Growing your business is also great for the overall U.S. economy. According to the SBA, since 1995, small businesses have generated 64 percent of new jobs and paid 44 percent of the total United States private payroll. An SBA loan is a financial win-win.
An SBA Loan Can Save Your Business Big Bucks
When small business owners use an SBA loan to refinance existing high-interest debt, they can save hundreds of dollars - or even thousands - each month.
SmartBiz customer Milton Martinez owns Triple D Towing in Texas. His SBA loan is significantly helping cash flow. “By getting rid of the two small loans I’m saving $15,000 - $18,000 dollars,” Martinez reports. “That’s money I can put back into growing my business or into savings.” There is debt that cannot be refinanced with an SBA loan. Check with lenders before you start the application process to see if your debt qualifies for a refinance.
SBA loans typically have the lowest interest rates compared to other funding sources like a merchant cash advance, peer-to-peer loan or credit cards. The Small Business Administration (SBA) sets the maximum interest rates that banks can charge on 7A loans. The maximum interest rates on SBA 7A loans are also based on market interest rates. As market interest rates change, so will the maximum interest rates on these loans. At SmartBiz, rates are currently 6.25%-7.25%.*
SBA loan programs are generally intended to encourage longer-term small business financing. Loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. Maximum loan maturities have been established: 25 years for real estate, 10 years for equipment (or demonstrated useful life), and terms for a working capital or inventory loan should be appropriate to the borrower’s ability to repay, up to 10 years. SmartBiz SBA loans have a 10-year term.
After completing the SmartBiz online application, you can get funds in as fast as 7 days. The more organized and motivated a borrower is, the faster the loan will fund.
No Prepayment Penalty
Borrowers can pay off an SBA loan early with no prepayment penalty.
SBA Loans Can Be Easy
Thanks to advanced technology, the SmartBiz online platform streamlines the pre qualification and application process. SBA loans have typically gotten a bad rap over the years as too cumbersome. Other perceptions of SBA loans include requiring an unusually large amount of paperwork. According to the SmartBiz survey, 68% of borrowers changed their perception of SBA loans after working with SmartBiz mainly because the process was easier and faster than they thought, i.e “They made the process much more easier than most banks”, “Easier than anticipated”, “SmartBiz took a lot of the stress out of applying for a loan. Very professional”.
- SBA loans through banks in the SmartBiz lending network have a variable rate of Prime Rate plus 1.5% to 3.75%.