The Benefits of SBA Financing for Buying a Business
What Is an SBA Loan?
When you’re thinking of starting a business and you’re looking for capital, you may naturally think of an SBA loan. An SBA loan is financing supported by the U.S. Small Business Administration. These loans can be used to purchase, expand, or renovate an existing business.
Some of the benefits of an SBA loan are less stringent qualifications, longer repayment terms, larger loans, and more competitive interest rates. The SBA guarantees a portion of the loan for lenders, reducing their risk and making them more likely to loan money to entrepreneurs.
Depending on your qualifications, you could get anywhere from $500 to $5.5 million to acquire, grow, or overhaul your next business venture.
The Benefits of an SBA Loan
Compared to non-guaranteed loans, SBA loans are easier to obtain and offer a wide range of loan amounts. Benefits of most SBA loans include:
Easier approval. Because the SBA backs up to 85% of the loans under $150,000 and up to 75% of loans over $150,000, lenders are more easily able to disburse funds. Easier qualifications help more people enter the market.
Longer repayment terms: Easier terms mean less pressure on your cash flow.
Wide range of loan amounts: Qualified borrowers can seek from $500 to $5.5 million.
Maximum interest rates: A cap on the amount of interest you pay helps keep borrowing costs lower.
Ongoing support: Some loans come with free counseling and education to support your business.
Different SBA Loans You Can Seek
The SBA backs loans for lenders because they want to increase access to funding for small business owners. To that end, here are some of the SBA loan types you can apply for:
7(a): From 7(a)-approved lenders, this loan is the SBA’s primary financing program. Applicants can seek up to $500,000.
504: A 504 loan offers long-term, fixed-rate financing from “mission-oriented, community-based SBA Certified Development Companies.”
Microloan: Loans of up to $50,000 for businesses and non-profit childcare centers that qualify. Loans come from intermediary lenders.
Exporter loans: Sometimes seen as too risky by traditional lenders, loans for exporters are handled through the SBA’s Office of International Trade.
Choose Business Brokers of Arizona to Help You Buy A Business
Since 2012, Business Brokers of Arizona (BBAZ) has been recognized for exceptional service and our expertise in business brokerage. Our deep understanding of the business-buying process means you’ll be able to rely on our comprehensive support from start to finish.
BBAZ has received numerous awards and accolades, reflecting our dedication to client satisfaction. We’ll guide you every step of the way, from finding the right financing for your business to finalizing the sale. You can put your trust in BBAZ to help you achieve your business ownership goals with confidence.
Ready to buy a business in Arizona? Contact us today to learn how we can help you secure an SBA loan and find the perfect business!
