How to Evaluate Commercial Loans from the Small Business Administration

The Small Business Administration is there to lend a helping a hand when you and your small business need them. But there are still things to consider when applying for commercial loans from the Small Business Administration.

If you are looking to financial a small business, the Small Business Administration is there to help you with loans. These commercial loans are often times offered with lower interest rates along with flexible terms since they are guaranteed by the federal agency. Because of this, you are able to start your business or make large financial changes to it without having to worry about falling into debt. Also, the Small Business Administration is there to help in the wake of any damages or losses from natural disasters.

With a loan from the Small Business Administration, you have the opportunity to find the lowest financing options for your small business. Remember, not everyone is going to qualify, but if you do, research and look for the best option for you. There are different types of options out there and some will be better for you to get on your feet than others.

Mostly banks are going to be the ones issuing commercial loans from the Small Business Administration. It is reported that with help from the Small Business Administration, they are able to guarantee up to 85 percent of loans that are $150,000 dollars or less. And guarantee up to 75 percent of loans that are over $150,000 dollars. In 2016, the Small Business Administration’s average loan amount was reported to be around $375,000 dollars. This can be a great option if you are looking to borrow to refinance your small business, open a new location or even remodel.

One of the many benefits of obtaining commercial loans through the Small Business Administration is the luxury of lower interest rates

Loan rates can vary, but the Small Business Administration are highly competitive when it comes to interest rates. Obviously, it will depend on the size of the loan, but most will see interest rates as low as 6.5 percent and usually always under 9 percent. These are great rates for any small business, whether you are just starting out or looking to refinance.

Be prepared to have documents ready that are prepared for the Small Business Administration to approve commercial loans

The Small Business Administration is going to require some documents to review from your small business before approval of commercial loans. To make the application process go smoother, have the following documents ready for review: a borrower information form, personal history statement, personal financial statement, 3 years of personal income tax returns, 3 years of business tax returns, a business license or certificate, business lease and your loan application history. The process can be quite intense, so the more prepared you are, the less stressful the entire process will be, from the start of the application, to the very end of closing.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.