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Whether you are starting from scratch, purchasing an existing business, or expanding one, you can’t do it without funds. That’s where business loans enter the picture. There are several types of local business loans you can choose from, but among them all, SBA loans have become significantly popular. These loans are backed by the government, which means lower risk for lenders and better terms for you.
From flexible repayment schedules to low down payments, SBA loans have several reasons to be preferred by business owners. In today’s blog, we will discuss different types of local loan solutions for businesses and discuss the SBA loan. If you are planning to apply for an SBA loan, then this blog is important for you. Stay tuned with us till the end to get valuable information.
When it comes to funding small businesses, each loan is unique and serves a different purpose depending on your business goals, credit profile, and financial needs. Here are the top 3 local business loan options for businesses.
If you have strong credit and a solid business history, local banks and credit unions can be a great choice. They can provide you with both secured and unsecured loans at a competitive rate. However, these loans take a long time to process and require detailed documentation.
In case you need quick access to funds, online lenders and fintech companies are suitable. As a lender, they offer fast approvals, flexible criteria, and short-term loans. They are just perfect for businesses that need working capital or can’t qualify for bank loans. The process is convenient and fast; however, interest rates may be slightly higher than bank loans.
SBA loans for business owners are backed by the USA Small Business Administration. These are one of the most trusted options for small business owners. They offer lower interest rates, more flexible repayment terms, and smaller down payments than bank loans. Two popular SBA programs are SBA 7(a) and SBA 504.
In the last paragraph, we learned a little about SBA loans and found that it has two popular programs. Let’s keep reading and learn about the SBA 7(a) and SBA 504 programs.
It is the primary and most flexible program and is used for various purposes, such as purchase, expansion, equipment, and working capital. The repayment terms extend up to 25 years in the real estate sector. Although the government guarantees a portion of the loan amount, lenders evaluate your personal and business credit, cash flow, and overall financial profile to approve your application.
SBA 504 Loans are for fixed assets, such as purchasing land, facilities, or large equipment, and they offer long-term, fixed-rate financing. The loan is structured with 3 parties. First, the small business contributes 10%. Second, a conventional lender, like a bank, provides around 50%. Finally, a nonprofit Certified Development Company (CDC) provides the remaining 40% of the loan amount. SBA finances the CDC portion through a government-guaranteed debenture.
As mentioned above, SBA 7(a) loans are primarily used to purchase a business. Let’s explore the following points and learn how they help in buying a firm.
When traditional lenders turn you down due to any risk, SBA loans provide access to funding for business purchases. Under this program, the government gives incentives to lenders for providing loans for purchasing a business.
SBA loans have longer repayment terms that may be up to 10 years following a business acquisition. It means more manageable monthly payments and improved cash flow for the new owner.
Buyers can secure financing with down payments as low as 10% in SBA loans. It allows them to keep more working capital for initial investments and operations.
SBA loan funds can be widely used. After buying a business, you can cover the costs of equipment, inventory, and working capital needed for a smooth transition.
SBA loans serve as instrumental tools for those looking to grow their businesses.
These funds can be used to purchase or renovate commercial real estate, expand an existing location, or finance new construction.
With funds from SBA loans, businesses can acquire essential equipment, machinery, inventory, and supplies with longer repayment terms, which can be up to 15 years for equipment.
SBA loans provide crucial working capital to manage day-to-day operations, cover payroll during slow seasons, or invest in marketing and staffing.
If you have high-interest, short-term debt, like credit cards or merchant cash advances, you can consolidate them into a single, low-interest SBA loan. It lets you save thousands over interest while freeing cash flow.
The SBA caps the interest rate that the lender charges you. It often results in interest rates being lower than market rates and saves you a significant amount of money over the life of the loan.
The following steps will help you get an SBA loan.
SBA loans are one of the best local business loans. If you are applying for an SBA loan to purchase a business, know that it’s a complex process and you may need professional help. We are Lion Investment, your partner and guide, supporting you throughout the process. We also help with credit building and business growth planning. Contact us and discuss your needs.
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13 Nov 2025 
Lion Investments 
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(410) 891-5976
100 West Road Suite 300 Towson, MD 21204, USA
broker@lioninvestments.org