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Obtaining funds to start or grow a business can be a daunting challenge, particularly for new or small enterprises. Traditional business loans often require a substantial amount of assets or a solid credit history, making it difficult for many entrepreneurs to secure the necessary funding. Fortunately, there are alternative funding options available for businesses in need of capital.
One notable resource is the Small Business Administration (SBA), a federal agency dedicated to supporting and empowering small businesses across the nation. The SBA's loan programs provide small businesses and entrepreneurs with access to various funding options that come with several advantages, such as extended repayment terms, lower down payments, and competitive interest rates. These benefits make it more feasible for businesses to obtain the financing they need for their operations and growth.
Businesses who are eligible:
To qualify for an SBA loan, businesses must meet certain criteria. These include being a for-profit operation located in the U.S. and not exceeding SBA size standards. Additionally, businesses must show their ability to repay the loan and demonstrate that they cannot obtain financing from other sources at reasonable terms. Business owners may also need to meet specific personal credit score requirements. Meeting these qualifications is essential for businesses seeking an SBA loan to support their operations and growth.
SBA loans can be used for various purposes, such as:
Monterey County Bank offers specialized expertise in SBA 7(a) and 504 loans:
7(a) Loan | VS. | 504 Loan |
7(a) loans are a flexible option for businesses, covering various needs like working capital, real estate, equipment purchases, and business acquisition. | Purpose | 504 loans are more specific and intended to be used to finance commercial real estate or large equipment purchases. |
Maximum loan amount | Loan Amount | The typical maximum loan amount is $5 million, with some exceptions allowing for $5.5 million. |
10 - 25 Years | Terms | 10 - 25 Years |
Adjustable or Fixed | Interest Rate | Fixed |
Typically within the range of 0% to 10%, although it can differ based on factors such as loan amount, lender, and the borrower's individual circumstances. | Down Payment | Generally requires a minimum 10% down payment. |
Collateral may be needed for larger loans to secure the amount. | Collateral | Purchased property or equipment is commonly used as loan collateral. |
Contact our team to learn more or get started:
Our experienced team of loan specialists are ready to help you determine if an SBA loan is the right fit for your business needs. We provide personalized guidance throughout the application process, ensuring you understand the requirements and explore all available options. Contact us today for expert assistance in navigating the path to securing your SBA loan!
