SBA Loan

How Much Does It Cost to Take Out an SBA Loan?

How Much Does It Cost to Take Out an SBA Loan?

The fees and interest payments vary for each type of Small Business Administration (SBA) loan. Those who plan to apply for a standard SBA 7(a) investment should expect to pay up to 9.75% in interest depending on their chosen repayment terms.

For instance, you could pay as low as 7.25% for a 7(a) loan with a repayment term that’s shorter than seven years. Mortgages that have more than a seven-year repayment might only have an interest rate of up to 9.75%. Take note that the actual prices will vary based on whether you apply for a fixed or variable loan. In Utah, the 7(a) loan is among the popular SBA loan types. You should inquire with a bank that offers small business loans in Salt Lake City to know the best option.

Loanable Amounts and Rates

If you borrow between $25,000 and $50,000, you could pay up to 8.25% in interest fees for a loan with a repayment term of seven years or earlier. The maximum rate for the same amount with a more extended repayment period will be up to 8.75%. Loan amounts worth more than $50,000 will have interest rates of 7.75% and 7.25% for more or less than seven-year repayments, respectively.

You will pay the highest interest rates for loans worth $25,000 and below. The maximum rate for less than seven years of repayment will be 9.25%, while it’s 9.75% for more extended repayments. The fees for SBA Express loans are quite different. The maximum rates for credits worth $50,000 and below shouldn’t exceed 11.5%. Loans worth more than $50,000 should have interest rates not higher than 9.5%. The Express loan is a good alternative for businesses that need to know a verdict within 36 hours.


Other Fees and Requirements

The SBA also charges a certain percentage for guarantee fees. Most lenders pass on these fees to consumers, but some are willing to cover these added expenses. There are no guarantee fees for loans worth $150,000 and below. You’ll need to pay a 3% fee if you borrow between $150,000 and $700,000 with a repayment term of more than one year. Higher loans worth up to $5 million with a repayment term of more than one year will entail a 3.5% fee.

Business owners must also not have defaulted on any debt to the federal government, including student loans. It also pays to check your credit report to find out any inaccuracies. Banks and other SBA-approved lenders will still run their credit investigation to review your financial capacity and creditworthiness.

In the end, before you look for a lender, make sure that your business meets the small business standards of the SBA. Use the size standards tool to determine if you qualify for the 7(a) loan. You should, of course, own a business in the U.S. to be eligible for an SBA loan. Property firms, lending firms, and non-profit groups won’t be qualified, as well as pyramid sales companies and those that are deemed to be operating illegally.

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