Could an SBA Loan help your business grow?
The Small Business Administration (SBA) partners with lenders to offer government-backed financing programs that help small businesses access credit. SBA loans range from small to large and can be used for most business purposes, including long-term fixed assets and operating capital.
These loans have different features and terms than conventional loans and can offer businesses several key advantages. The primary benefit to small businesses is an easier approval process because the Small Business Administration assumes some of the risk from the loan, enabling lenders to offer more flexible terms and affordable interest rates.
SBA 504 Loan
The SBA 504 loan program provides approved small businesses with long-term, fixed-rate financing up to $12,000,000 to acquire fixed assets for expansion or modernization.
SBA 7(a) Loan
The SBA 7(a) loan program is the SBA's primary program for providing financial assistance up to $5,000,000 to small businesses.
SBA 504 vs. SBA 7(a): What are the pros and cons?
The 7(a) loan is the SBA’s flagship loan program. Accordingly, it offers the most flexibility in what the funds can be used for: working capital, expansion, and/or equipment purchases.
On the other hand, if you have a specific financing need for land, machinery, or facilities, a 504 loan could be the right solution. Here are some other points of consideration:
- Interest rate: The 504 comes with a fixed interest rate, whereas the 7(a) usually has a variable rate, though some fixed options are available.
- Terms: Depends on what the funding is used for, but 7(a) loans generally offer shorter terms if desired, whereas 10 years is usually the minimum for a 504 loan.
- Down Payment: Minimum of 10%, but often more for a 7(a) loan.
How to Apply for SBA Loans in Iowa
- Statement of personal history
- Personal financial statement
- Personal income tax returns for the last three years
- Business tax returns for the last three years
- Business certificate or license
- Business lease
- Loan application history
If you are interested in taking advantage of this debt relief option, we encourage you to contact a lender today.
Explore the benefits of an SBA Loan today!
Looking for small business loans in Iowa? Contact one of our knowledgeable local commercial lenders!