SBA Loans Rates

Have you ever wondered why a lot of entrepreneurs and aspiring business owners choose the Small Business Administration (SBA) when they need loans for their business? It could either be a young and new business, or it could be a business that’s in need of financing for operations.

Whatever reason it might be, business owners approach and ask help from the SBA to suffice their business’ needs. But why is the SBA their first option in terms of loans? Aren’t there other options that they can go with? What makes the SBA so special?

Loan Requirements of the SBA

If we were to look at the requirements and the qualifications that the SBA look for, they’re difficult to attain. As a matter of fact, it seems impossible for a business that is not performing well to apply. But why do people choose to try with the SBA even if the requirements are impenetrable?

Is it because of the rates of the SBA loans? Is it because of the amount that they can grant business owners and clients? The answer is both – the interest rates of the SBA loans are low and the amount that they can provide for funding is high and it can go high as $5 million.

SBA Loans Rates

Just like any other company or lending institution, the rates that the SBA has for their loans vary from the negotiation between the borrower and the lender. But to give you an example, the SBA 7(a) loan, one of the types of loans they offer, the rates of it are as follows:

Loan amount $25K and less

• The maximum rate if the maturity is 7 years or less is the base rate plus an interest rate of 4.25%
• If it’s 7 years or more, it’s the base rate plus 4.75%

Loan amount $25K to $50K

• If the maturity is 7 years or less, the interest would be the base rate plus 3.25%
• But if the maturity is 7 years or more, the interest would be 3.75%

Loan amount $50K or more

• If the term will end in 7 years or less, it’s going to be the base rate plus 2.25%
• But if the maturity is 7 years or more, the interest would be at 2.75% plus the base rate

As you can see, the rates of this type of SBA loans are substantially lower than what other institutions like banks, credit unions, and even lending companies offer. That’s why they’re crazed in applying for the loans of the SBA.

The problem, to iterate, is with the requirements that they’re asking. It’s difficult to land an approval with the SBA, and it’s even more challenging to give them what they want.

Alternatives to SBA Loans

Have you already tried applying for any loans with the SBA? Did you get rejected because of the requirements and the qualifications that they’re looking for? Don’t worry, we here at SoFlo Funding are always ready to help.

Our company has adapted to the needs and the practices of other lenders, so we did our best to compile the best practices to give our clients the experience they deserve. Our loan programs can be considered as an alternative to the loans offered by the SBA because we exercise the same thing.

Though we don’t offer the same rates as the SBA loans, we do our best to keep the interest rates at the minimum