SBA Loans

SBA-backed funding with low interest rates and great terms.

Designed specifically for small business growth.

Borrow $5,000 to $5,000,000

Funding in as little as 3 weeks

Longest term lengths

Lowest down payments

What Is an SBA Loan?

An SBA loan is a small business loan through the U.S. Small Business Administration (SBA) that allows business owners to get financing through an SBA lender. The agency doesn't fund you. Instead, the SBA guarantees your loan amount up to 85% with the lender.

The two most popular SBA loan programs are the 7(a) and Microloans. Both provide working capital at the lowest industry APRs and long-term repayment lengths. The SBA 7(a) allows a maximum loan amount of $350,000, while Microloans range from $500 to $50,000. You can learn more about loan options at SBA.gov.

The main downsides to SBA loans are the amount of paperwork needed and the longer application process than short-term business loans. Wize Funding can help you through the process and find the ideal lender match.

Benefits of SBA Loans

While securing an SBA loan is a lengthy process that requires quite a bit of paperwork and time, it's one of the best ways to fund a business or refinance existing debt. The capital you get from an SBA loan can be used for all business purposes, some including buying equipment or inventory, refinancing existing debt, or opening a new location.

Federally Guaranteed Up to $5M

Since the SBA partially backs the financing, borrowers have the lowest down payment requirements. The average down payment for SBA 7(a) loans is 10% of the total amount.

Long Term Lengths

The five- to 25-year loan term lengths offered by SBA loans are usually the longest compared to traditional financing options. The longer repayment terms allow business owners to make monthly payments at a slower pace.

Low Interest Rates

SBA loans offer good APR rates through its approved banks and lending partners. They can have fixed rates or variable rates. Wize helps you navigate the approval process to secure the best loan possible.

Capital Can Be Used for Any Business Purpose

The financing secured through an SBA loan can be used for various business needs. Buying real estate, equipment purchases, consolidating existing business debt to a lower interest rate, or other common business financing needs are appropriate for this type of loan.

What Are SBA 7(a) Loans?

The agency's most popular financing option is the SBA 7(a) loan. The SBA created the 7(a) to level the playing field for small businesses to secure working capital from commercial lenders.

A startup business that wouldn't have the cash flow history to secure a traditional loan can be eligible to secure an SBA loan since it's partially guaranteed by the federal government (up to 85%).

Average interest rates: 5% to 10%

Maximum loan amounts:

-Standard - $5 million

-Small Loan - $350,000

-SBA Express Loan - $500,000

-Export Express - $500,000

-Export Working Capital - $5 million

-International Trade - $5 million

Term length: 10 years for working capital loans, 25 years for real estate loans

Minimum credit score needed: 640+

Down payment: 10% to 20% of the total loan amount

Pros

✓ Backed by the SBA up to 85%

✓ Long term lengths

✓ Capital can be used for any type of business expense

✓ Competitive interest rates

Cons

x High paperwork and documentation requirements to apply

x The time to get funded is long compared to traditional loans

x Requires a down payment

x Some collateral is needed to secure a loan

What Are SBA Microloans?

The SBA Microloan program is designed to provide funding to nonprofit lenders that provide financing to for-profit businesses. Compared to 7(a) loans, SBA Microloans have a maximum financing amount of $50,000 and aren't guaranteed by the federal agency.

-Average interest rates: 8% to 13%

-Loan amounts: Up to $50,000

-Term length: Up to 6 years

-Minimum credit score needed: 575+

-Down payment: Not required

Pros

✓ Great financing option for underserved business owners like women, veterans, and minorities

✓ Business owners with limited credit history can qualify

✓ Low interest rates

✓ Longer term length compared to traditional loans

Cons

x Limited to $50,000 in working capital

x Lengthy process can take 30 days or more

x Must provide a business plan with estimated financial projections

x Some collateral is needed

SBA Loan Use of Funds

SBA Loans are here to help your business grow in many ways. You can use the money for all sorts of things, big or small. Here's a short list of what you can do with the funds.

✓ Equipment needs

✓ Inventory and supplies

✓ Pandemic & coronavirus relief

✓ Refinancing debt

✓ Payroll & taxes

✓ Rent & utilities

✓ Business expansion

✓ Purchasing real estate

✓ Repairs & upgrades

✓ Leasing

FAQs about SBA Loans

Thinking about an SBA Loan for your business? It can be a bit confusing at first. We've put together some common questions and simple answers to help you out. Take a look below and see how it all works.

When will SBA loan funds be deposited?

On average, it takes around three to six months to receive funds, although the duration of the process depends on a number of factors. Things generally move slowly because the SBA has to work with banks and outside lenders to complete the transaction.

What can you use SBA disaster loans for?

Capital can be used for a wide range of business-related expenses. Common uses include startups, emergencies, real estate, mortgages, and buying equipment.

Who qualifies for an SBA disaster loan?

For COVID EIDL loans, small businesses, U.S. agriculture businesses with less than 500 employees, and nonprofit organizations can be eligible. The list of businesses eligible for funding becomes even more expansive for declared disasters.

However, at Wize, we strive to provide you with funding whether you have excellent or poor credit. If you have questions about your credit history, call us and talk to an advisor to explore your options.

How long does it take to be approved for an SBA loan?

The SBA loan application process tends to be drawn out and paperwork-heavy. Lenders will want to carefully review all documentation to make sure all financial statements, tax returns, and eligibility criteria are met to limit the risk of default.