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SBA Loan Comparison

16
MAY, 2020

Table Of SBA loan

The table below is a comparison between common SBA loans and another loan. The primary difference between SBA and other loans in the USA is the fact that SBA loans are more secure from lenders’ perspective.

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SBA loan chart

  SBA 7(a) Loan SBA 504 Loan Conventional
Use General Purpose Real Estate & Equipment General Purpose
Loan Size $350,000 to $5,000,000 $2,000,000 to over $15,000,000 Unlimited
Interest Rate
  • Variable or fixed rate
  • Fully amortized through the term of the loan
  • Interest rates are based on the current market conditions with various indexes up to prime and individual loan review
  • Variable or fixed rate
  • Fully amortized through the term of the loan
  • Interest rates on 504 loans are set at an increment above the current market rate for five-year and ten-year U.S. Treasury issues
Variable or fixed rate
Terms Available & Amortization Periods
  • 25 years: real estate
  • 10 years: equipment, business acquisition
  • 5 to 7 years: working capital
  • All loans are fully amortized
  • No balloon payments
  • 20 years fully amortized real estate loan
  • 10 years fully amortized equipment loan
  • No balloon payments
  • Typically 20 year amortization for real estate with 5 year balloon
  • 10 year balloon
  • 5 Years: equipment
  • Typically 1 year line of credit working capital
Loan Purpose
  • Expand, acquire or start a business
  • Purchase or construct real estate
  • Refinance existing business debt
  • Buy equipment
  • Provide working capital
  • Finance building improvements
  • Purchase inventory
  • Purchase existing building
  • Land acquisition
  • Ground up construction
  • Expansion of existing building
  • Finance building improvements
  • Purchase equipment
  • Expand or acquire a business
  • Purchase or construct real estate
  • Refinance existing business debt
  • Buy equipment
  • Provide working capital
  • Construct leasehold improvements
  • Purchase inventory
Loan Structure
  • Up to 90% bank loan
  • 10% borrower down payment
  • 50% bank loan
  • Up to 40% CDC loan
  • 10% borrower down payment
  • Up to 80% bank loan
  • 20% borrower down Payment
  • Plus closing costs
Loan Fees
  • 1.75% – 2.75% of loan depending on size
  • Fees rolled into loan
  • Weighted average fees for both loans are 2%
  • Fees rolled into loan
  • Up to 1% origination fee
  • Fees paid at closing
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