SBA Loans

Fees

The SBA isn’t lending to you directly, so it charges a guaranty fee for its loan guaranteeing service. This is originally charged to the lender, but the lender then passses it on to the borrower.

• Guaranty fee of 1.7% for loans up to $150,000

• Guaranty fee of 2.25% for loans greater than $150,000

Often, partnered banks will charge fees for origination or loan packaging. These, however, just depend on the bank.

Interest Rates

• A maximum of 2.75%, depending on your credit score, plus the Prime Rate (which is determined by the government).
• the Banks determine if the interest rates are fixed or variable for SBA 7(a) loans
• The SBA restricts how much a bank can make off of a loan by limiting the maximum spread.
  • Greater than $50,000 borrowed and a repayment term less than seven years = Prime Rate + a maximum spread of 2.25%
  • More than $50,000  and a repayment term greater than seven years = Prime Rate + a maximum spread of 2.75%

If you choose to apply for an SBA 7(a) loan with FaaSfunds, the banks we partner with offer interest rates of 8.25% total, subject to change with the Prime Rate.

APR

Different than your interest rate, APR will include the guaranty fees and origination fees, which will give you the total cost of your loan.

Repayment

• Seven years for working capital
• 10 years for equipment loans
• 25 years for commercial real estate loans

Fees

CDC/504 loan fees are typically 3% of the loan amount. These can sometimes be paid with the loan. You’ll also need to put at least 10% down on your purchase.

Interest

Interest rates for CDC/504 loan programs can get complicated. In short, the exact rate won’t be known until about 45 days after the loan is secured, but you can usually expect it to be between 5% and 6%.

This is because the CDC/504 loan isn’t just one loan – 50% comes from the bank and 40% comes from a Certified Development Corporation (a CDC). They other 10% is your down payment. They pool their projects and auction them to investors.The sale determines the interest rate, and the sale takes place about 45 days after you close the loan. Historically, it’s been around 4% to 5%, and after bank rate, the total interest usually comes to between 5% and 6%.

This complicated process, thankfully, is all handled automatically.

Repayment

• 10 to 20 years

Fees

There are no fees with SBA microloans.

Interest

You can expect interest rates for microloans to range from 8 – 13%. Your bank will set the exact rate depending on your business credit score and other specifics.

Repayment

Microloan repayments depend on how much you borrow and what you’re using it for, but the maximum term the SBA allows is six years.