Things to Know about SBA Loan Down Payments
Things to Know about SBA Loan Down Payments
Regardless of the need of your business, such as the renovation of a structure, buying real estate, or purchasing a new business, the Small Business Administration is a great source to obtain funds. SBA loans are among those that come with the lowest rates. This is because these loans are guaranteed at least by the federal government, and are more easily available to small business owners, unlike what you have with traditional bank loans. Below is a discussion on the down payment you need to provide in order to acquire an SBA loan.
Some SBA loans require a down payment. It depends upon the program you are seeking and the lender who is providing the loan. SBA loans like the CDC/SBA 504 loan and the SBA 7 (a) loan require a down payment. Meanwhile, the SBA CAPLines Program, the SBA Export Loans, the SBA microloan, and the SBA Disaster Loans do not require a down payment.
The Reason
The SBA will have an amount to pay to the lender if the borrower fails to pay back. Therefore, down payment is a way of checking if the borrower has the ability to match the risk they pose with a safety.
