DoNotPay Breaks Down the Most Popular SBA Small Business Loans

Small Business Loan Request Letter DoNotPay Breaks Down the Most Popular SBA Small Business Loans

Everything You Should Know About SBA Small Business Loans

If you lack the funds to keep your operations going, applying for a small business loan is an effective course of action. This type of financial aid is a viable choice for up-and-coming entrepreneurs struggling to cover short- and long-term expenses.

In this article, we break down the most popular SBA small business loans and address:

  1. How loans work
  2. Who the most prolific SBA lenders are
  3. What the borrower’s qualifications should be

We will also explain how to start the application process using DoNotPay—a powerful AI-operated app that can help you organize the required paperwork and generate a flawless loan request letter with speed and efficiency.

What Are SBA Small Business Loans?

The Small Business Administration (SBA) is a government-backed agency that secures funding for small to medium-sized businesses. Instead of the SBA issuing the funds, the federal small business loans are provided by private lenders, such as banks, credit unions, and non-profit organizations. The SBA acts as a mediator and loan guarantee.

You can apply for a wide range of programs that cover specific business-related purposes, such as:

The SBA loans are a popular form of financial aid since the overall terms and conditions are designed to benefit small-scale businesses. Some of the advantages of getting an SBA small business loan include:

  1. Competitive rates—The prime rate is the base for SBA interest rates, with the addition of “spread,” i.e., markup rates
  2. Low fees—Apart from the initial guarantee fee and the annual service fee, you won’t have to worry about additional costs
  3. Ample loan terms—The repayment window for the SBA loans is incredibly big, with the maximum loan maturity of 25 years

Who Are the Top SBA Lenders?

The SBA collaborates with hundreds of lending institutions throughout the U.S. Currently, some of the most active SBA lenders are:

  1. Live Oak Banking Company
  2. U.S. Bank, National Association
  3. Wells Fargo Bank, National Association
  4. TD Bank, National Association
  5. Bank of America, National Association

Types of SBA Small Business Loans

Depending on the basis for the loan and the required budget, you can select from a wide range of SBA programs. Here are the most popular loan types:

SBA Loan ProgramMaximum Loan AmountInterest RatesLoan Purpose
SBA 7(a) loans$5,000,000Prime rate + 2.25%–4.25% (loans younger than seven years)

Prime rate + 2.75%–4.25% (loans over seven years)

  • Working capital (both short-term and long-term)
  • Refinancing current debt
  • Business expansions
  • Renovation
  • Equipment and furniture
SBA 504 loans$5.5 millionFixed-rate from 2.81% to 4%
  • Maintenance, modernization, or renovation of existing real estate and facilities
  • Construction of new facilities
  • Equipment and machinery
SBA Express loans$500,000Prime rate + 6.5% (loans under $50,000)

Prime rate + 4.5% (loans over $50,000)

  • Working capital
  • Equipment
  • Real estate purchase
  • Business expansion
SBA microloans$50,000Negotiable
SBA Community Advantage loans$250,000Prime rate + 6%For miscellaneous purposes. It cannot be used for revolving credit
SBA Export Express loans$500,000Prime rate plus 6.5% (loans under $50,000)

Prime rate plus 4.5% (loans over $50,000)

Increase in export development
SBA international trade loans$5 millionPrime rate + 2.25%–4.25% (loans under seven years)

Prime rate + 2.75%–4.25% (loans over seven years)

  • Expansion of export sales
  • Modernization
  • Funding for competing with global marketplace rivals
Small Business Administration disaster loans$2 millionFixed rate of 3.75% with a 30-year loan termRepairment costs after a disaster

Small Business Administration Loan Requirements

You must ensure you are eligible for a small business loan. The specific requirements may differ depending on the lender and loan program, but the basic qualifications include:

  1. Businesses registered in the U.S.
  2. For-profit business
  3. Business maturity (except for startup loans)
  4. Good business credit history (credit score above 650)
  5. Legal and financial documentation:
  6. Balance, profit and loss, and cash flow statement
  7. Income tax return (business and personal)
  8. Active business licenses and leases
  9. Financial projection for the upcoming year

Note that the SBA requires borrowers to provide collateral when applying for government grants for small business loans. Each person who owns 20% of the company must guarantee the loan terms and conditions will be met.

If you are eligible, you can proceed to choose a lender and fill out an application form using the gathered documentation.

Increase the Likelihood of Getting a Loan for Your Small Business With DoNotPay

With so many active lenders and loan programs, the application process can quickly become overwhelming. With a DoNotPay subscription, you will be able to complete the mandatory steps and increase the likelihood of getting the desired SBA small business loan and find a suitable lender.

Our Small Business Loan Request Letter product streamlines the administrative procedure and composes a flawless loan request letter.

All you have to do is:

  1. Gather all the paperwork
  2. Access the product by logging in to DoNotPay
  3. Tell us about your small business and provide the necessary details about the loan
  4. Upload the documents

Once you answer the questions from the chatbot, our AI-powered app will generate your application letter using the provided information.

Don’t have a lender in mind yet? We will provide you with the top three lenders that fit your needs. You only need to access our integrated Find Online Business Loan Lender product and answer a few questions.

Resolve Various Business Problems With the Help of DoNotPay

Handling annoying administrative issues is the last thing you want to worry about while trying to build a business empire. The good news is that you do not have to! DoNotPay has developed many nifty products that make various pesky tasks easy to complete.

Some of the small-business-related matters we can help you with are:

DoNotPay can also make communication with your clients or business partners easier as we enable you to fax and mail your letters, forms, and other important documents without leaving your office.

Maintain a Good Business Reputation

It is no secret that building a trusting relationship with clients takes time and effort, so why have all that hard work ruined by negative online reviews that are fake? DoNotPay is here to help you remove illegitimate, fake reviews in a matter of clicks!

Want to dispute unfair chargeback requests but are not sure how to go about it? By using our Fight Chargebacks feature, you can have DoNotPay create a customized chargeback rebuttal document in a few minutes.

With our app, you can also protect your trademark from people trying to use it, file the self-certification request with the Privacy Shield program, and handle many other aspects of your business hassle-free!

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