Business loans and why is now a great time to get one?
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Business goes on, even during a pandemic! Borrowing money at low-interest rates provides a comfortable level of certainty for business owners. Low rates won’t stay forever; higher rates will return, and the difference between interest rates now and five years from now could be enormous.
Your business needs more capacity than ever to be able to move quickly, make sure you’re prepared for all contingencies, and, especially keep everything running smoothly. It can be a great time to consider getting a needed business loan in order to help all of those things happen. How can you best go about getting a business loan, and why is now a great time to get one?
Key small business loan statistics
Small Business Loan Interest rate
Small business loan Interest rates are at an all-time low at the moment. According to Brex, there are a lot of different kinds of business loans you can take out. With the low-interest rates, now could be a great time to get one. Steps are being taken to make sure that small businesses are given the chance to get funding during pandemics.
This means changing some restrictions and restructuring this next year. With some banks, interest rates for small business loans can be as low as 2.5%! This historic rate can benefit you more than ever.
Current SBA 7A Loan Interest Rates
The SBA sets the maximum interest rates that banks can charge on SBA 7a loans. The current maximum interest rate ranges from 5.5% to 8%, depending on the size of the loan and the amount being borrowed.
The maximum interest rates on SBA 7(a) loans are based on market interest rates. As market interest rates change, so will the maximum allowable interest rates on these loans.
To qualify for an SBA 7(a), expect to have the following: a current balance sheet, profit, and loss statements, the last three years of federal income tax returns
Cheap Real Estate
If you are needing a loan in order to access a new space for your expanding business, those are more than readily available right now as well. Unfortunately, some businesses are closing due to the pandemic’s strictures and ongoing economic complications.
According to Franchise Gator, because of the greater supply, you may have greater negotiating power with landlords. This can give you the freedom of expanding to fill your space needs, while also not needing to worry over higher mortgages.
Choosing the Type of Loan
You have to make sure that whatever type of loan you choose to keep your business healthy and happy now will not become a burden to you in the future. You can’t foresee every possible outcome, but some things can help you more than others. You don’t want a great deal of pressure on your cash flow, both for your ability to continue production and also for salary purposes.
Besides commercial real estate-based loans, there are SBA loans, vehicle loans, business term loans, or If you are having trouble receiving an SBA Loan or bank term loan, try applying for online business loans through alternative lending. The Department of Agriculture also has options for small businesses in rural areas to apply for loans.
Your small business relies on you, and your community relies upon your small business. Taking advantage of the good deals which can benefit businesses during this time can help your future prospects for growth. In a few years, you can have a healthy, happy, thriving business, with a team that is secure and grateful for your excellent business management.
Check out this article on How to Use a Business Loan Wisely
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