6 Best Small Business Loans of 2022 | Smart Change: Personal Finances
The SBA guarantees loans for amounts between $30,000 and $5 million, with annual percentage rates ranging from 5.5% to 8%. They are best suited for long-term investments, buying real estate or equipment, buying other businesses, and refinancing existing loans.
Types of SBA Loans
Here are some common types of SBA loans.
SBA 7(a) Loans: The most common type of small business loan. These loans are best suited for the acquisition of real estate, but can also be used for short and long term working capital, furniture and supplies, acquisition and expansion.
Real estate and equipment loans (CDC/504): Provide fixed rate financing of up to $5 million to support business growth and job development. These loans can be used to purchase land, build facilities, obtain equipment and finance renovations. They cannot be used as working capital, to pay or refinance debts, for investments or for rental properties.
Microcredits: Helps small businesses and specific non-profit nurseries. There are microloans available up to $50,000. This type of loan can be used as working capital and to acquire supplies, equipment, furniture and inventory.
Disaster Loans: Low-interest loans offered to small businesses located in declared disaster areas. Disaster loans can be used to repair or replace real estate, personal property, machinery, equipment, inventory or business assets.