Let’s talk SBA loans. As the name implies, Small Business Association loans cater to and help small and new businesses to expand and become stable companies. SBA loans are of different types to best suit the borrower’s needs.
Standard Loan
This is one of the typical loans for local businesses. In this type, borrowers can apply for as much as five million dollars depending on the approval. There will be a revolving line of credit for a term of not more than ten years. Collateral is only needed whenever loans will exceed twenty-five thousand dollars. The SBA can guarantee lenders 85% of the loan amount but that’s if the proceeds are up to $150,000.00. They guarantee 75% exceeding that amount. Its turnaround time is about five to ten business days.
Small Loan
Small loans are typically of the same features and requirements as standard loans. The difference is the maximum amount that can be borrowed is $350,000.00 and there is no revolving credit line involved. The rest are pretty much the same as the standard loan.
Express Loan
If you want the loan in an emergency and do not have time for the long process, this is the best type for your needs. It approves your loan in 36 hours and the maximum loan amount is $350,000. The SBA guarantees only 50% of your loan.
CAP lines Loan
This type of loan allows you to borrow funds for the short term and it’s a flexible type of loan. This is a great type of loan but the maximum amount is $5 million. This loan depends on the needs of your company and can be used for seasonal funding for operations. If it’s a contract type, then it can cover the direct labor and operation costs of a certain contract. Also, it can be used for the builder’s CAP line to fund renovations or for repairs and short-term construction. The company may use assets as payments for lenders in an event that monetary payments cannot be made. There is a revolving line of credit. It can be used while the account is still active and the company is still capable to make repayments. You may receive this funding approval within 21 days.
