SBA- stands for Small Business Administration that offers several loan program fashioned to support small businesses to grow. Thus they serve you better at the lowest interest rates. There are majorly three different rates that we will highlight and talk about.
They include; 7(A) Loans (strategically for general business loan purposes), CDD/504 Loans (this is set out to finance real estate and other fixed assets), and the third are the Disaster Loans (set out to rebuild as a result of disaster).
You must have gotten an idea and target of what you want to do with your loan. But you must use it economically! Let’s take a good look at the current rates……
Rates for SBA loan rates of April 2020
- The current rates for 7(a) loans are (50% – 9.75 %.)
- The current rates for CDC 504 loans: Approximately 2.39% – 2.77%.
- The Maximum rates for disaster loans (00% with no credit available elsewhere or 8.00% with a credit available elsewhere.
Exclusively, you get to know more about the SBA loan program. What do you need to do? Take a study of what you’ve got below…
More details of SBA Loans Rates
SBA 7(A) Loan Rates
Among the three SBA loan rates, this is the most popular program. They align with banks and some other related financial institutions, to offer low-cost loans for most business purposes. They could be of working capital, refinancing, equipment and so on.
Note that SBA does not directly loan money under the 7(a) loan program as it guarantees a portion of the loan and has set limits on the interest rates, fees, and the term lengths financial institutions can offer.
The current interest rates of SBA 7(a) vary based on your term length, the amount borrowed, and the rate base.
Check for the few current rates for SBA 7(a) business loans
NOTE: SBA Express and SBA Export Express loans have slightly different rates. Currently, the maximum rate for Express loans of $50,000 or less is 9.75%; the rate for loans above $50,000 is 7.75%.
Qualifications for SBA 7(a) Loan
Every business that is profitable to capital is likely eligible for a 7(a) business loan. Also, those who partner in lending are ultimately responsible for borrowing eligibility. Thus, here are the requirements you need to meet;
- You must have run a business that has lasted for two years at least.
- Ensure that your credit scores are moderate.
- Have a strong cash flow and debt-to-income ratio.
Loan Rates for SBA CDC/504
The SBA CDC/504 Loan program like I mentioned earlier, is used to fix assets like Land, real estate and machinery for instance. However, each SBA is committed to lenders who support in making this a real deal. Thus, SBA partner with Community Development Companies (CDC) and some other financial partners and averagely, the typical 40% Fund is coming from CDC, 50% by financial partner (concurrently are bank partners), while the 10% comes from your business. You stand a chance of paying a larger percentage of the cost as a new business enterprise under two years’ experience. But in as much as you can use 7(a) loan to fix assets, CDC/504 borrowers benefit from low, fixed, interest rates and still a greater chance of borrowing a larger amount.
Qualifications for CDC/504 Loan
How much chance can your project create job opportunities? If this concurs with management experience, you have passed the first requirements to meet before we look into the rest. Here they are… you must;
- Do business in the US.
- It must be a “for-profit” business
- Have funds elsewhere.
- Have relevant management expertise and business plan.
- Have plans on how to pay back the loan.
- Have a net worth less than $15 Million and average net income to be less than $5 million involving taxes.
SBA Disaster Loan Rates
SBA Disaster loan is strategically orchestrated to help businesses stay afloat and rebuild following a disaster. Number one qualification for a disaster loan is typically a business or consumer in a declined disaster area. It is used for handling cost which insurance policy did not cover or FEMA.
Any business that has been affected by a disaster will probably qualify for a long-term loan, low-cost loan to cover your physical and economic damages. The economic damages are used to sustain the small business until they stabilize to their normal operations. It is often a working capital that will keep your business afloat.
Present Disaster Loan Interest Rates
This depends on credit available elsewhere as per se (SBA)
Note: if you have credit available elsewhere, the maximum interest rate will be 8% but if you don’t have credit available elsewhere the maximum interest rate will be 4%.
Qualifications for SBA Disaster Loan
To qualify for this loan, you must
- Must be in a declared disaster area
- Must have experienced physical or economic damage to your business
- Must have demonstrated the ability to repay the loan
- Must have acceptable credit