Commercial SBA Loan in Chattanooga

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Commercial SBA Loans in Chattanooga, as the name suggests, are commercial loans provided by participating lenders, typically banks, partially guaranteed by the U.S. Small Business Administration (SBA). Although there are strict requirements for these loans, if you can get one, the flexible terms and low-interest rates can make it one of the best small-business loans. Here is an overview of a Chattanooga commercial SBA loan, including how they differ from traditional loans, their types, and how to apply for one for your small business.

Chattanooga Commercial SBA Loan vs. Traditional Loans

SBA loans differ significantly from traditional business loans in several ways. The risk that the lender is taking on varies, as do the rates and terms. Here are a few additional ways that a Commercial SBA Loan in Chattanooga and a traditional business loan differ.

SBA loans have more documentation requirements than traditional bank loans.

The borrower typically has a “riskier” financial profile when compared to people applying for a conventional loan from a bank, which is how SBA loans differ from traditional bank loans. One thing follows from this: paperwork. To guarantee the loan, the SBA requires much more information from both you and the lender. However, the loans can be closed with little trouble if you work with a bank or lender with a knowledgeable SBA department.

Interest rates on SBA loans are reasonable.

As of April 2022, the maximum interest rate on any Chattanooga Commercial SBA Loan is 8%. The rates you’ll pay with alternative lenders, which may be high depending on your credit score, are much higher than that.

SBA loans have longer terms for repayment.

Longer terms on SBA loans mean lower monthly payments for business owners, which is another benefit. Loan terms for 7(a) and 504 loans range from 10 to 25 years. Depending on your agreement, a fully amortized loan may be set up for you. As the loan matures, interest and principal are paid with each payment so that it is fully repaid at the end of the predetermined term. Some conventional bank loans include a “balloon payment” requirement requiring you to make a sizeable payment at maturity. For some business owners, this may be absolutely devastating.

Chattanooga Financing: Types of Commercial SBA Loans

You should know the different loans the SBA offers when looking for SBA financing. The following Commercial SBA Loans in Chattanooga for business owners are worth examining:

SBA 7(A) Loans

The 7(a)-loan program is the most common SBA loan product. These loans can be used for several things, including working capital, business growth, purchasing equipment, and real estate. The largest loan you can get is $5 million; the repayment period can last up to 25 years.

SBA Express Loans

SBA Express loans are quicker and smaller than standard SBA 7(a) loans. They are most suitable for companies with good credit histories that require quick funding and can borrow up to $350,000.

SBA 504 Loans

You can encourage company expansion and job creation with a fixed-rate loan for significant fixed assets. Long-term financing is available through the SBA 504 loan program to purchase or improve real estate, buildings, large machinery, and equipment. Working capital, inventory, debt consolidation or refinancing, and real estate investment are not permitted for 504 loans.

Low-interest rates on SBA 504 loans up to $12.5 million are available, along with repayment terms of up to 25 years.

Proactive Lending Group for Your Chattanooga Commercial SBA Loan Needs

Customers who have solid projects and strong financials behind their proposals may be able to find a decent Commercial SBA Loan in Chattanooga with the aid of Pro-Active Lending. Contact our office as soon as possible to learn more about your options because a Chattanooga Commercial SBA Loan might be a perfect choice for you.

Chattanooga is a diversified and profitable business hub with no single dominant industry. The region’s collaborative nature is apparent in its super-fast internet connection, focus on STEM-based education, and its support of a myriad of arts and culture. A complete system of highway, air, water, and rail transportation helps make the city an ideal transportation and distribution location. In addition, Tennessee Valley Authority (TVA) and its power distributors offer a growth credit program that provides significant savings to new commercial and industrial customers requiring a large capacity.

Pro-Active Lending can help those customers who have a good project and good financials behind their proposal to find a good SBA Loan for the Chattanooga area. SBA loans are appealing to lenders, especially these days,
because they are guaranteed by the United States Government’s Small Business Administration, and the lender only has to guarantee a small portion of the loan while the government handles the rest. A Chattanooga SBA Loan
could be a very good option for you, so contact our office as soon as you can to discover your options.

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