SBA LOANS
These loans include long repayment terms, some of the lowest rates on the market, and a maximum borrowing amount of $5 million because the Small Business Administration is guaranteeing them. Depending on how you intend to utilize the money, repayment can take anywhere between 7 and 25 years. For borrowers with excellent credit who have been in business for at least two years and are prepared to put in the time and effort required for the lengthy application procedure, SBA loans are the best option.
Pros:
-
Lowest rates on the market
-
Take out a loan up to $5 million.
-
longer loan periods of 7 to 25 years
Cons:
-
Long application process
-
More qualifications required
Best for:
-
Expanding businesses or refinancing debt
-
Business with good credit willing to wait for funding
What Is the Small Business Administration?
The term Small Business Administration (SBA) refers to a U.S. government agency that is designed to bolster and promote the economy by assisting the country's small businesses. Established in 1953, the SBA's largest function is to counsel individuals who want to start and grow their own businesses.
It provides a series of tools on its website to assist new and existing small business owners. The agency is headed by an administrator and deputy administrator and also has a chief counsel for advocacy and inspector general—all of which are confirmed by the Senate. The SBA has at least one office in every state.
KEY TAKEAWAYS
-
The Small Business Administration is a government agency designed to bolster and promote the economy by providing assistance to small businesses.
-
The agency was established in 1953.
-
The SBA is headed by the administrator and deputy administrator who are confirmed by the Senate.
-
The agency offers various resources to small businesses including access to capital, entrepreneurial development, government contracting, and advocacy services.
-
The SBA's loan guarantee program is among its most visible elements.
Small businesses qualify for loans more easily when they are guaranteed by the SBA. The agency also allows entrepreneurs to make lower payments for a longer period. Despite numerous attempts to do away with the SBA entirely, many political officials and offices continue to support the agency. The SBA’s ability to offer loans has also been significantly strengthened by the American Recovery and Reinvestment Act (ARRA) of 2009 and the Small Business Jobs Act of 2010.
