SBA Loans

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To $5.5 million

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Intro To Small Business Administration (SBA) Loans

SBA loans have become the most sought-after business loans in the market. There is no other business loan that can match their interest rates and terms. These advantages, however, make it difficult to qualify for SBA loans. The application process is often confusing for business owners due to misconceptions about SBA loans. You must understand the differences and similarities between SBA loans and traditional business term loans before you can be approved.

What is a SBA loan?

SBA is short for ” Small Business Administration”. The Small Business Administration, or SBA, is not a lender but a government agency. SBA loan applications are not sent to the SBA directly. You must instead apply through one of the three types of financial institutions, such as commercial banks, credit Unions, or alternative financing facilitators such as Blue Tree Financing. These loans are available to help small business owners like you grow or start their businesses.

SBA loans are different from other business loans because the SBA will guarantee up to 85% for loans up to $150,000, and up 75% above that amount up to $500,000. The SBA guarantees up to 85% of loans under $150,000 and 75% for loans above that amount, but not exceeding $500,000.

However, the SBA does not accept or reject any applications. It’s up to each financial institution. Each has their own approval criteria. The institution must submit its own application to the SBA once it approves a request.

$50K - $5.5M

Maximum Funding Amount

FACTOR RATE

Start at Prime + 2.5%

TERM

10-25 Years

SPEED

8-12 Weeks

How do SBA Loans Work?

This is the most common type of SBA loan. This loan can be used to finance almost anything: the hiring of more employees; purchasing new equipment; paying off existing debts; ordering bulk inventory etc. You can borrow up to $5M with repayment terms up to 25 Years, depending on your investment. Rates of interest range between 5% and 10%. A 1.7% fee is charged for loans under $150K, and a 2.5% fee is charged for loans above that amount. The fee may be included in the total loan cost. You may also pay an origination or loan packaging charge.

Loans are not allowed for certain purposes. This includes: buying a building to be leased by another business; reimbursing an owner of a business for a prior investment in the company, and paying back debts to the U.S. government.

Microloans are available through the SBA. The name of this product is derived from the size average SBA loan. You can borrow up to $50,000 with a repayment term of up to six years. Rates of interest range between 8% and 13%. SBA microloan also comes with no fees.

This loan is only available for major assets like heavy machinery or commercial property. Most of the time, assets are used as collateral.

Up to $5.5M is available with a repayment term of 20 years. Interest rates are between 5% and 6%. The total fees are usually 3% and the down payment is approximately 10%.

This loan is unique in that you have to specify how the money will be used. You will be able to determine the amount of money you can borrow, and if you’re approved.

If you borrow $65,000 to create jobs, then you have to create one job. Manufacturing companies must create one new job for each $100,000 borrowed. Your borrowing limit is $5 million.

Your borrowing limit will be $5.5 million if you are using the loan to support public policy. This could include business district revitalization, minorities business development or expansion of women owned businesses.

If you are a small manufacturer you must create at least one new job for every $100,000 that is guaranteed by the SBA. The loan must be used to promote public policy. Your borrowing limit is $4 million if you meet the criteria.

This product is designed for businesses who have suffered physical damages from natural disasters such as floods or tornadoes.

The maximum loan amount is $2 million. Your interest rate will be 3.75 percent, and your maximum term will be 30 years. The first payment is deferred for a year after the date of the promissory notes. No fees are charged, nor is collateral required.

EIDLs are not available through third-party lenders or banks. You must instead apply directly via the SBA website.

Before the CARES Act was passed, businesses that were eligible had to show they couldn’t obtain credit or loans from any other source and didn’t have enough cash to cover their operational costs. Since then, this requirement has been removed. Someone with an existing credit card could theoretically still be approved for an EIDL.

While EIDLs were traditionally available only to registered entities (LLCs and corporations), they are now accessible by independent contractors, tribal businesses, co-operatives, and sole proprietors. EIDLs remain available only to companies with less than 500 employees.

You can apply for a EIDL if you have less than $200,000 and you do not need a guarantee.

SBA Loans – Facts, Research & Reports

What are the Advantages of SBA Loans?

SBA loans are popular because of their low interest rates. shoppers for business loans are often most concerned with interest rates. Banks offer low-interest business term loans, although rarely lower than 5%. These two products cost much less than other options or newer technologies. For example, short-term financing can have an APR as high as 95%.

SBA loans have very high limits on borrowing and long terms. The right loan can transform your business if you use it for the correct purpose. When business owners are planning large investments, they will look for these loans. You can not only access the funds to make your investment but also avoid damaging ‘s cash flow by paying low interest rates. You may have to reduce your expenses or postpone other plans to pay for more expensive products. SBA loans, however, will allow you to cover your operational costs while still making monthly payments. SBA loans are also the best option for businesses that want to maximize their return on investment.

What are the Disadvantages to SBA Loans?

Everyone who has ever shopped for a business loan knows that convenience is not free. SBA loans, being the most convenient and advantageous, must have the strictest requirements.

SBA loans are easier to obtain logistically than business term loans, if the SBA is guaranteeing a large portion of the loan. This is logically true. 85% of the total is still not 100%. In the event of default, the financial institution will still lose money. They are therefore only slightly more generous when it comes to SBA loans. You have slim chances of getting an SBA loan if you do not think you will be approved for a business term loan.

The lack of universal, concrete requirements is another disadvantage that SBA loans has. Remember that each institution has its own criteria for approval. Some institutions may favor certain industries or business types. Banks, for example, are known to favor established companies that have large bank balances.

It is important to warn aspiring borrowers that applying for SBA loans takes a lot of patience. It can take up to three months for you to find out if you have been approved. The applicant may have to visit multiple institutions to be accepted, and they might even be asked to return in a year after their finances have improved. SBA loans are not as easy as submitting one application and receiving your money within a few weeks.

PRODUCTS
CONS

Who Qualifies for SBA Business Loans

Businesses that are approved generally meet the following criteria.

Annual Revenues
$ 1 k+
Credit Score
1 +
Years Time In Business
1 +

How to Apply for SBA Loans

Blue Tree Financing has partnered with SBA lenders. We can approve and distribute your loan in as little time as three weeks. How to start:

Your SBA Loan Gets Set up – Now What?

It’s not just about getting financing for your business. This is a great opportunity for to start building or improving your credit.

No matter what type of loan you receive, be sure to make your payments on time. Keep your credit balance below the limit if you receive a business credit line or any other form of revolving credit.

Your credit score will improve if you consistently pay your business financing on time. This will give you access to better rates and terms the next time you need business funding.

What if I am denied an SBA loan?

Applications can be rejected for many reasons due to the numerous requirements for approval. It is also easy to overlook requirements. You should only apply for a loan if you know the requirements of your institution. To find out this information, you’ll need to directly contact the institution.

being declined for an SBA loan does not mean that you will not qualify for other beneficial options. These products may not offer the lowest interest rates or highest borrowing amounts in the market. growth is usually slower than anticipated. It’s possible that you will need to start out with a business term loan, or a business line of credit . Your credit score can be improved by demonstrating a track record of making timely payments.

We may suggest alternative business financing tools such as business credit cards, or personal loans if you are still having trouble qualifying. These are both much easier to qualify for than business loans, and they can be accessed via Blue Tree Financing. We find that bad credit can prevent business owners from getting financing. You should then consider services. Credit repair professionals can boost your score by removing the problems that are affecting it.

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Current monthly sales deposit average to your business bank account?
How much Working Capital would you like for your business?