Financing is often the difference between a business that grows and one that stays where it is. The question is not just whether you can borrow, but whether the structure of the loan actually fits what you are trying to build.
Hakim Kassam, Director of SBA Lending at Midwest BankCentre, explains why business owners turn to SBA loans and what makes them different from conventional financing.
Lower Down Payments and Longer Terms
Two features drive most SBA loan applications, and both come down to preserving cash. Here is what that looks like in practice:
- Lower down payment requirements, generally in the range of ten to fifteen percent on a project, and in some cases no money down depending on the project type, such as an expansion or a rent replacement
- Terms up to twenty five years when the project involves purchasing commercial real estate
- Terms up to ten years when the project involves buying a business
- Fully amortizing structure, which stretches the payment out over the life of the loan rather than leaving a balloon payment at the end
A longer term means a smaller monthly payment. A smaller required down payment means less cash out of the business up front. Together, those two things open the door for borrowers who would not qualify under conventional terms.
Is an SBA Loan Right for Your Business?
Every project is different, and the right answer depends on what you are financing, how much cash you want to keep working in the business, and what kind of payment your operation can support. That is a conversation worth having before you start shopping for a building or negotiating on an acquisition.
For more information about SBA loans, visit us online or stop by one of our local branches. Our team will walk you through the options and help you figure out what actually fits.