Features of SBA Real Estate Loans
Features of SBA Real Estate Loans
The Small Business Administration provides funds in the form of loan programs for the benefit of small businesses and entrepreneurs. Note that SBA does not hand out loans by itself, but guarantees a large percentage of the loans handed out by the approved lenders. The pros and cons of SBA real estate loans are similar to the entire class of SBA loans. They offer promising prospects but are not easy to get.
High Terms
In case your company is performing well and has a credit score above 600, you would be eligible for an SBA loan. Your interest rates will change according to the lender, but SBA loan rates will rely on the current prime rate and a spread that lies between 2.25% and 2.75%. Some lenders charge closing costs and fees as well.
Lengthy Application and Underwriting
Remember that SBA real estate loans essentially take a longer period of time to complete the application process than other loan applications. For instance, it may take a maximum of 75 days for funding to be sanctioned. The common procedures involved in a loan application such as providing business and personal credit reports, business documents, bank information, and tax returns, are the same for SBA financing real estate loans.
