close
Eatery Business

6 Best Small Business Loans in 2022 | Smart Change: Personal Finance

The SBA guarantees loans for amounts between $30,000 and $5 million with an annual percentage rate of interest 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

Below 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 real estate purchases, but can also be used for short and long-term working capital, furniture and supplies, acquisitions and expansion.

Real Estate and Equipment Loans (CDC/504): Provide up to $5 million in fixed-rate financing to support business growth and employment development. These loans can be used to purchase land, build facilities, purchase equipment, and fund renovations. They may not be used for working capital, to pay off or refinance debt, for investment or for rental property.

Microcredit: Supports small businesses and certain nonprofit daycares. There are microloans up to $50,000. This type of loan can be used as working capital and to purchase supplies, appliances, furniture and fixtures.

Catastrophe Loan: Soft loans for small businesses in designated disaster areas. Disaster loans can be used to repair or replace real estate, personal property, machinery, equipment, inventory, or business assets.

Richard Dement

The author Richard Dement