What is an SBA Loan
SBA stands for Small Business Administration. The Small Business Administration is a government agency that works with direct lenders to provide business loans to small businesses. The SBA reduces risk for direct lenders and makes it easier for them to access working capital. Which in turn, makes it easier for small businesses to get business loans.
Business loans guaranteed by the Small Business Administration range from small to large and can be used for most business purposes. The cons of SBA loans are lengthy paperwork, approvals can take up to 3 to 6 months, and some SBA programs require collateral. The pros are reasonable interest rates that start at 6.50%, payment terms up to 30 years, and monthly payments.