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SBA loans are small-business loans guaranteed by the SBA and issued by participating lenders, mostly banks. The SBA can guarantee up to 85% of loans of $150,000 or less and 75% of loans of more than $150,000. SBA loan rates and terms typically are more manageable for borrowers than other types of financing and being guaranteed by the SBA reduces risk for the lender, which may make it easier for the business owner to get a loan.
Small Business Administration (SBA) loans can make all the difference for small business owners. Virtually every business owner has heard of SBA loans. They’re the pinnacle of small business aid. Without the SBA, getting a bank loan is nearly impossible. The SBA makes it easier. Still, even with the SBA’s help, getting a business loan from a bank is still far more difficult than it should be. That’s where we come in. At First Down Funding, we help clients obtain the funding that they need to run their businesses effectively. SBA loans can be tough to obtain, but don’t give up on them just yet. Talk to us at FDF.
Speak to one of our qualified and seasoned Small Business Funding Managers to better understand what funding options and approvals we have for your small business.
|LOAN TYPES||MAX AMOUNTS||RATES||SPEED|
|Merchant Cash Advance||$7.5k – $1m||Starting at 1.09||1-2 business days|
|SBA Loan||$50k-$10m||Starting at 5%||3-5 weeks|
|Business Term Loan||$10k to $5m||Starting at 5%||1-3 business days|
|Business Line of Credit||$10k to $250k||Starting at 8%||1-3 business days|
|Receivables/Invoice Factoring||$50k-$10m||Starting at 5.8%||1-2 weeks|
|Equipment Financing||Up to $5m per piece||Starting at 5%||3-10 business days|
|Revenue Based Business Loans||$10K – $5m||Starting at 9%||1-3 business days|
Wondering if an SBA loan is right for you? Ready to get started? Apply now to see how much you qualify for!
For most alternative small business loan products, an applicant only has to have been in business for a minimum of 6 months and be able to provide documentation of steady sales. However, the SBA has more stringent rules. To apply for an SBA loan, your business must meet the following requirements:
Don’t fit the criteria? Don’t worry. We have plenty of other business financing options that can fit your needs. Take a look at your other business loan options. If you’re not sure which option you need, feel free to give us a call.
Once you’ve made sure that you fit the above criteria, you’re ready to apply. Here are the steps you’ll need to take to ensure a smooth loan process.
While most alternative business loans require few documents, SBA loans work a bit differently. The SBA itself set the rules and regulations for these business loans. To apply for an SBA loan, you’ll need the following documents:
Once you’ve gathered your documents, you’re ready for the next step.
After all of that work, you’ll be glad to find that your next step is easy. Simply apply online through First Down Funding. You can also give us a call to go over any questions you may have.
Like we said, banks have some pretty strict requirements. They want to loan money to borrowers who come with the least amount of risk. If the SBA hadn’t gotten involved, banks would only loan money to a select few people who meet their very specific requirements.
SBA stands for the Small Business Administration, a US federal government agency. They offer all sorts of small business help, but they’re most famous for their business loan help. The SBA helps small business owners obtain loans from banks and other credit organizations. While many people believe that the SBA provides the money for those loans, the truth is that the SBA simply guarantees those loans up to 85%. In other words, if the borrower defaults on the business loan, then the SBA pays 85% of that loan back to the bank. This way, banks can take on “riskier” loan seekers. Still, as you’ve noticed from reading this page, obtaining an SBA loan requires a lot of time and attention.
Now, First Down Funding works differently than the banks. We have a partnership with SBA lenders, creating a “marketplace” atmosphere. As a result, our SBA loans are often much easier to qualify for than they are through other sources.
SBA loans are harder to get than your average loan. With long repayment terms, and low interest rates (and of course, having the government back you in case you can’t make repayment), there are plenty of business owners who want this option, which means a lot of competition. The application process is longer and more rigorous than others, and the eligibility requirements are more extensive than other loan options as well – business owners might even mold their product to fit the necessary specifications, just to get this loan.
All in all, it’s important to know everything it takes to get an SBA loan. It’s never too early to speak with First Down Funding to further discuss if an SBA loan is the right fit for you.
SBA loans have some of the lowest costs available, which is why so many small business owners seek them. Just like with any other business loan, your costs will vary depending on your credit score, your loan length, etc. First Down Funding clients often get better rates on business loans than they would from other lenders. Our marketplace SBA loans start at just 5%. Most lenders start their SBA loans at more than 7%. The lower costs at FDF come from the “marketplace” atmosphere that we described above.
|GROSS LOAN SIZE||FEES (SEE NOTE 1)||NOTES|
|Loans of $150,000 or less|
(See Note 2)
|2% of guaranteed portion|
Lender is authorized to retain 25% of the fee.
|Maturities that extend 12 months|
|SBA Express loans to qualified Veterans & Spouses up to $350,000||Zero (When program is zero subsidy.)|
|$150,001 to $700,000||3% of guaranteed portion.|
|$700,001 to $5,000,000|
(See Note 3)
|3.5% of guaranteed portion up to $1,000,000|
Plus 3.75% of guaranteed portion over $1,000,000
|Short Term Loans – up to $5 million||0.25% of guaranteed portion||Maturities of 12 months or less|
|SBA On-Going Guaranty Fee||A percentage of the outstanding balance of the guaranteed portion. The fee is set at time of approval.||Paid by Lender and cannot be passed on to the Borrower.|
Note 1: SBA specifies the amount of certain fees each fiscal year for all loans approved during that year.
Note 2: For example, the guaranty fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the Lender may return $425.
Note 3: For example, the guaranty fee on a $5,000,000 loan with a 75% guaranty ($3.75 million guaranteed portion) would be 3.5% of $1,000,000 ($35,000) PLUS 3.75% of $2,750,000 ($103,125), which totals $138,125.
You can contact us anytime for help calculating your loan payments, or if you have any other questions.
**Based on past customers
Time in Business
Contact First Down Funding for all funding options.