What is a SBA loan?
A Small Business Administration (SBA) loan is one of the best financing tools available to help small businesses. It’s a loan backed by the U.S. government, making it possible for small businesses to acquire long-term financing.
What are the advantages/benefits?
Because a SBA loan is backed by the U.S government, E-Central is able to offer a longer term, thus helping keep your monthly payment low and increasing your cash flow.
How can I use the funds?
Whether you are a new business or an existing business, you can use an SBA loan to:
- Purchase land or buildings
- Acquire equipment, machinery, or inventory
- Finance business acquisitions
- Refinance existing debt
- Upgrade facilities
- Keep as working capital
What are the lengths of terms?
The lengths of terms vary for each loan based on the use of funds. For working capital, debts refinance, and inventory the maximum term is 7 years. If you are purchasing machinery, equipment, or another business, then 10 years is the maximum term. For real estate purchases or substantial improvements it’s up to 25 years.
Who qualifies?
The SBA defines a small business as “independently owned and operated and not dominant within its industry.” In other words, just about any small for-profit-business is eligible. The three basic criteria are (1) type and size of business, (2) use or proceeds, and (3) personal resources and issues of the principal.
What’s the difference between a SBA loan and the Credit Union’s Business Term loan?
A SBA loan is an excellent lending solution for many businesses. However, there are business situations that may not qualify under SBA guidelines, but may qualify under the Credit Union’s guidelines. Additionally, the maximum term for a Business Term loan is 7 years.
How do I apply/start?
For more information about SBA loans, call us at (626) 799-6000. If you need more information, then visit www.sba.gov.