Small Business Administration Loans
The U.S. Small Business Administration (SBA) is a federal agency supporting business development and business growth for all small businesses. This federal agency is not a small business loan lender. The U.S. Small Business Administration establishes rules and regulations for all Small Business Administration Loans and provides assistance with offering a guarantee on the loan. Guarantee: in case of default, covers a portion of the Small Business Administration Loan which reduces the risk of the source lending the funds.
FACTS AND REQUIREMENTS
Time to Funds
BENEFITS & DRAWBACKS
- SBA financing up to 90%
- Loan terms up to 30 years
- Variable and Fixed rate options available to business owners
- Extensive paperwork necessary
- Requires collateral in some instanes
- Only top qualifying clients are approved
What Are Small Business Administration Loans?
As a small business owner, you know that it takes money to make money, but what financing option will work best for you if you don’t have the means to fully self-fund your business? An SBA loan is an excellent way for many qualified candidates to obtain the capital necessary to build their company through financing. The Small Business Administration (SBA) is a federal agency that supports the development and growth of small businesses across the United States. In an effort to help small businesses gain affordable financing, the SBA has extended a guarantee to certain lenders. This guarantee promises to pay lenders a portion of the loan back should the borrowers default. As a result, small business owners are able to receive financing at a lower rate than traditional loans as the SBA has decreased the risk to lenders through their guarantee. At AMP Advance, we offer these business building loans and have experienced funding managers to help you throughout the entire lending process.
Facts and Requirements
Small businesses can borrow as little as $50,000 or as much as $5,000,000 through the AMP Advance SBA Loan.
Prime+ rates are offered to qualifying candidates.
Payback is negotiated between 10 and 25 years.
Time to Funds
Receive your financing funds in as little as 30 days.
- Depending on the type of loan you obtain, the SBA will guarantee up to 85% of your business loan--this reduces your risk, which will decrease your APR and also increase your likelihood of being approved.
- You can keep your monthly payments low by having loan terms of up to 25 years.
- Both variable and fixed interest rates are available to those who qualify for the SBA loan.
What is a SBA Loan?
In July of 1953, the federal government formed the Small Business Administration. Ever since its inception, The SBA has been committed to the growth and wellbeing of small businesses. SBA Loans are backed by a guarantee from the Small Business Administration. This guarantee helps small business owners seek financing by decreasing their risk factor to lenders. To satisfy different business needs, the SBA offers three different types of loans. The three different types of small business administration loans are SBA 7(a), SBA 504, and SBA Express Loans. Each loan offered by the SBA offers different terms and conditions to best serve the type of company borrowing money. To qualify for an SBA loan, lenders typically require you to meet terms such as a credit score of 620 or higher, having an established business for at least two years, and an annual revenue of at least $100,000. However, if you don’t meet these requirements, many lenders will work with you to see if they can help you to qualify.
Why Choose Small Business Administration Loans?
Although the paperwork required upfront may seem a bit overwhelming, SBA loans are actually one of the best financing options a small business owner can obtain. Because they are backed by the SBA, these types of loans are incredibly flexible and come with low interest rates and great loan terms. These guaranteed loans are also easier to qualify for than traditional bank loans because the SBA assumes up to 85% of your loan should you default. If you have already applied for and been denied by a traditional banking loan, try applying for an SBA loan, as the terms are more favorable for small businesses. Because of their flexible terms and low interest rates, SBA loans are easier to payoff and decrease your likelihood of default. In addition to being flexible and easier to qualify for, Small Business Administration loans can be used for almost any business expense you need to build your company.
SBA 7(a) Loans
SBA 7(a) loans are considered to be some of the most efficient and effective loans on the alternative lending market. These loans have bank quality rates and terms and have virtually no restriction put on business related purchases. This includes, but is not limited to, business acquisition, costs for a startup/franchise, refinancing of existing loans, equipment purchases, and a countless other business related needs. Because of the unparalleled flexibility of SBA 7(a) loans, these small business administration loans are the most commonly used small business loans on the market. SBA 7(a) loans were originally intended to provide specific industries with assistance in the form of financial assistance, but now provide assistance to companies in many different industries. The Small Business Administration 7(a) program is built of a few different subsidiary programs including the:
- Export Loan Program
- Rural Business Loan Program
- Express & Pilot Programs
- Special Purpose Loans Program
The SBA 7(a) loan has played a crucial role in sparking economic growth across the country due to its generous terms and mission to aid entrepreneurs by helping them obtain capital.
If you’re in real estate, an SBA 504 is probably the best loan option for you. They are limited to real estate only so they are optimized for real estate purchases. SBA 504 loans allow you to finance up to 90% of the appraised property value or 100% of the outstanding principal, whichever is lower. They also include eligible refinancing costs. Eligibility requirements for SBA 504 loans include:
- Business must be for profit
- Tangible net worth must be below $7.5 million
- Net income can’t exceed $2.5 million after taxes
- Rental investors and businesses that speculate are not eligible
No other loan on the market offers terms as optimized for small business real estate ventures as an SBA 504.
Just as its name suggests, an SBA Express loan is optimized for speed and efficiency while still providing great bank-like rates and terms. To achieve the expedited timeline, the maximum amount businesses are able to finance is decreased and usage from financing is limited to financing equipment, debt consolidation, and increasing working capital. Important facts to know when considering an SBA Express Loan are:
- Financing maximum is $350,000
- Pre-Approval can occur within 2 business days
- Maximum SBA guarantee is 50%
- Interest rate is negotiable between borrower and lender
- Rates can be variable or fixed, tied to a prime rate, LIBOR, or the optional peg rate
- Rates may not surpass SBA’s maximum rates
- Lenders are not required to take collateral for loans up to $25,000
SBA Express loans are perfect for businesses who need money fast, but want trustworthy service with favorable rates.
The Small Business Administration started the SBA loan program to encourage economic growth and the American dream of entrepreneurship. As a small business owner, you might be overwhelmed with the process of applying for an SBA loan, but that’s where we come in. Here at AMP Advance, we want your financing experience to be as smooth and stress free as possible. That’s why we have experienced and knowledgeable funding managers here to help you with any questions you may have every step of the way. The following is a guideline to help you understand the basics of applying for a Small Business Administration loan:
1. Fill out the application available here. Make sure to have the following information available:
- Business and personal financial statements
- Business and personal tax returns for the last three years
- Completed application outlining how the proceeds will be used
- Signed authorization for background and credit checks
- Resumes for your primary managers and your owners
- You can use AMP Advance’s platform to connect with lenders that offer these long-term, low-interest loans. In order to expedite the process, follow the SBA’s recommended business plan outline. This will likely save you further questions and time down the line.
2. After we’ve received your application, we’ll need time to review your information. Typically the process from start to finish takes 30-60 days. If you have any questions or concerns during the waiting period, don’t hesitate to reach out to us. We are happy to guide you through the process!
3. Once you’ve received and accepted our pre approval offer, we’ll begin the underwriting process. This includes collecting financial documents and an official analysis of your small business. Once we’ve completed the analysis, we’ll give you an official answer about whether or not your business will be financed through our SBA loan program.
4. Congratulations! You’ve made it to closing. The length of time to close depends largely on the complexity of the loan, but we’ll make sure to keep you updated throughout the entire process. Once we’ve officially closed, you’ll receive your financing and you can start working towards your goals.
At AMP Advance our mission is to help you get your financing as quickly and painlessly as possible. While obtaining funding can seem like a monumental task, we’re here to help break it down into small and manageable pieces. Our funding managers will guide you through the process to help ensure your success. We care about your business goals and are ready to help you achieve them. Start the AMP Advance SBA loan application process by filling out our online comprehensive application today.
Who is AMP Advance?
AMP Advance is a Miami based industry leading direct funding source out of Coconut Grove, Florida. We help those who are in need of small business financing by providing web based financing options & funding solutions. Our solutions assist small business owners find matching opportunities while assisting small business owners improve their overall financial situations. AMP Advance provides small business loans, business lines of credit, accounts receivables financing, equipment financing, unsecured business loans, and revenue based loans to millions of small business owners nationwide.