Frequently Asked Questions
Frequently Asked Questions

SBA Loan Frequently Asked Questions

Can SBA loans be paid off early?

If no real estate is involved, there is no prepayment penalty. For a real estate loan, the prepayment penalty goes away after 3 years.

Can SBA loans be used to pay off debt?

An SBA loan can be used to pay off mortgages, equipment or working capital loans, or credit card debt at lower rates and longer terms. It is common for a growing company to have credit card debt used to fund growth. A new SBA loan will substantially lower your monthly payments.

What SBA loans are forgivable?

For loans approved before September 30,2021 the SBA will pay debt service for 3 months with no repayment required.

What SBA loans are available for self employed?

SBA loans are to companies, so if you are self-employed you need to form a corporation, which can be done online. A corporation also provides more legal protection that a sole proprietor.

When do SBA loans have to be paid back?

The real estate term is 25 years, working capital or business acquisition loans are 10 years, these are full term loans with no balloons.

Why are SBA loans good?

SBA loans offer longer terms, require less equity, and need less collateral than conventional loans. Loans can be approved with only business assets as collateral.

What can SBA loans be used for?

Business startup, business purchase, business expansion, building purchase, refinance existing debt, special use such as hotels, restaurants, gas stations, senior housing.

Can a startup company get an SBA loan?

Yes.  A startup needs experience in the business, a good business plan, and enough capital to sustain the business until sales are enough to pay expenses.

Can you get an SBA loan with no cash down payment?

Yes.  A business expansion loan is considered working capital that requires no equity.  A real estate acquisition loan or a business acquisition loan can be done with no equity if it is an expansion of an existing business.

Can you get an SBA loan without collateral?

Loans can be approved with only the business assets and no outside assets as collateral.

Can a nonprofit get an SBA loan?

A not-for-profit corporation cannot get an SBA loan.  The government provided SBA loan guarantee is a benefit in addition to the not-for-profit status, and both of these are not allowed.

Can an SBA loan be used to buy equipment?

Yes, SBA loan terms are often more favorable than vendor financing.

How to get help with an SBA application?

Contact Affinity Financial Services and George Skweres.  We are very experienced with SBA financing, have many funding sources, and have successfully closed many loans.  We can answer any questions you have, and complete the application process for you.

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