SBA Loans provide a critical lifeline for small businesses that don’t qualify to receive funding from traditional lenders. These loans typically have manageable fees, longer repayment terms, and lower interest. However, conventional loans might still be the best choice for most small businesses.
SBA loans take a notoriously long time to fund, not to mention the extensive paperwork and lengthy application process. So we’ve put together this detailed comparison to help you decide which loan option is better.
SBA Loan Pros and Cons
Pros
Lower interest rates Capped interest rates Flexible loan options Longer repayment terms
Cons
High denial rate by lenders Slow approval process Extensive paperwork
Conventional Loans Pros and Cons
Pros
Faster application and approval process Fewer restrictions Multiple loan options Competitive interest rates
Cons
Shorter repayment terms Strict collateral requirements Higher debt service requirements
Loan Type: Conventional Business Loan Wins
Your lender must have the type of loan product or financing to suit your business funding requirements. Diverse loan options also help you compare interest rates and terms to find the perfect financing for your situation.
The SBA has several types of loan programs, including:
7(a) Loans – This is the mos… Read More