The SBA 7(a) Loan Program
The 7(a) loan program is the most widely used SBA loan program. The 7(a) loan is a great choice for those looking to expand a small business or to establish a new one. One who qualifies for SBA loans can enjoy the flexibility provided by these terms and conditions.
Businesses can avail 7(a) loans for uses such as the following.
- Getting equipment
- Starting new or renovation projects
- Short and long-term capital requirements
- Refinancing a debt
- Buying real estate
- Purchasing an existing business
An SBA 7(a) loan allows you to borrow up to a maximum of $5 million in capital for the above reasons, or other reasonable needs. Aside from the flexibility provided by this, the interest rates and charged fees are much lower in comparison to other business funding options. The SBA is responsible for determining fees and maximum interest rates which lenders are allowed to charge.
Note that these rates are changed from time to time, and are maintained alongside the rates prevalent in the market. This is done to encourage small business owners to acquire borrowed money and invest in their companies. According to current standards, the interest rates range from 7% to 9.5%.