Although the Small Business Administration or SBA does not provide money directly to the small businesses it actually sets up proper guidelines for them that are effectively offered by banks, lenders as well as community development organizations. When you apply for this type of fund, it is advisable that you should fill up the documents that you try to get in the best possible way. In fact, this organization motivates the borrowers to collect the necessary details that the lenders always try to get hold of. This article will highlight on a few types of SBA loans that are available for small businesses.
SBA 7 (a) loans
It is considered to be one of the popular funds that are offered by the Small Business Administration. It is used for multiple purposes such as debt repayment purpose, payment of working capital and so on. In fact, this organization secures seventy five percent to eighty five percent of this kind of fund for a lender that usually results in interest rate that is even slightly above premium interest rate due to guarantee being offered by the government. You may apply for principle up to nearly two million dollars for this type of fund which term varies between seven to twenty five years.
SBA 504 loan
It is used in order to buy different types of things or in order to improve fixed assets in the best possible way. The total amount of money varies between more than one million to four million dollars. Unlike SBA 7 (a) loan, it is backed by forty percent of the total amount of money being offered by the Small Business Administration and the additional ten percent is offered by this type of organization as your collateral.
Microloans
Unlike other popular financial support, the Small Business Administration adopts a diverse approach with this type of fund. In fact, this organization offers money to non-profit companies who provide money to startup companies to the businesses at own discretion. In fact, its requirement varies from one person to the other. In fact, its total limitation is thirty five thousand dollars along with total term of six years. The rate of interest ranges from eight percent to thirteen percent and its size is determined as thirteen thousand dollars.
Specialty funds
It falls into the category of financial support that is being offered by the Small Business Administration. If you want to get qualified for them it is vital that you should fulfill certain criteria and that you should be aware of their terms and conditions before you actually apply for them. In fact, the interest rates on them vary between five to ten years along with a certain amount of premium. It is vital that it may not be used in order to pay the current debt or it can not be used in order to buy real estate property by all possible means.