LOAN FOR BUSINESS IN THE USA

Financial support programs for business in the USA

In the US, there are quite a few development strategies and programs for various types of businesses.

In what cases can you get a business loan in the USA?

In general, small business loans help businesses get the money they need to operate and grow. However, there are several types of small business loans, and it’s important to find the best option for your needs.

SBA loans

SBA loans are small business loans guaranteed by the Small Business Administration, including the SBA 7(a), 504, CAPLines, Export, Microloan, and disaster loan programs. These loans typically range from $30,000 to $5 million with low-interest rates and extended repayment terms of up to 25 years. However, the qualification requirements are more demanding than for other non-government backed loans and the application process usually takes longer.

Common types of SBA loans include:

SBA 7(a) loans. With a maximum loan amount of up to $5 million, the SBA 7(a) loan program is the SBA’s premier offering. Loans are typically used to purchase real estate, but can also be used for working capital, debt refinancing, and the purchase of business supplies. Current interest rates as of October 7 for SBA 7(a) loans range from 5.5% to 11.25%.

SBA 504 Loans. SBA 504 loans, available for up to $5 million, must be used for major fixed assets such as existing buildings or land, new facilities, and long-term machinery and equipment. Therefore, 504 credits cannot be used for working capital, inventory, or other normal business purposes. SBA 504 loan rates are lower than the rates set by the 7(a) program and range from approximately 2.81% to 4%.

SBA microloans. SBA microloans are available for up to $50,000 and are designed to help small businesses start or grow. This may include the use of funds for working capital, inventory, machinery, equipment, and other fixtures and materials necessary to run the business. Rates typically range from 8% to 13%, but it depends on the lender.

Term loans

Term loans are a traditional form of financing that is repaid over a set period of time. In general, short-term loans range from just three to 18 months, while long-term business loans can be extended for up to 10 years. While some term loans are designed for specific purposes, such as financing equipment or inventory, term loans can traditionally be used to finance most large business purchases. Business term loans are usually available for up to about $500,000, with annual percentage rates (APRs) starting at around 9%.

Credit lines

Unlike a term loan, which is paid in one lump sum, a business line of credit is a set amount of money that a business owner can access on a revolving basis. This means that the borrower can draw on the line of credit for a set period of time—usually up to five years. If the borrower repays part of the credit line early, he will have access to it again before the end of the draw period.

After the draw period ends, the borrower enters the repayment period and can no longer access revolving funds. Instead of paying interest on the entire amount, as with a term loan, a business owner who accesses a line of credit only earns interest on what they actually use.

Lines of credit are a good choice for businesses that want access to cash as needed for things like unexpected expenses and other cash flow issues. Borrowing limits typically range from $2,000 to $250,000 with annual interest rates ranging from 10% to 99%.

Equipment financing is a form of small business loan that helps businesses purchase the equipment and machinery they need to start and maintain operations. This flexible financing can typically be used for anything from office furniture and electronics to manufacturing equipment.

Equipment loans are secured by the items being purchased, so the size of the loan depends on the value of the equipment and the size of the down payment. However, the best equipment financing companies offer terms and limits of up to 25 years and $1 million or more.

Interest rates on equipment financing can be lower than those available with other types of financing and typically range from 8% to 30%. As with other small business loans, rates depend on the creditworthiness of the lender and the borrower.

What documents are required to obtain a business loan in the USA?

To be eligible for a business loan, you must provide the following documents:

The list of documents may differ depending on the bank or program, the grant you are applying for, but among the main documents, ​​such as:

• Business documentation (constitutional documents, articles of association, decisions on creation, extracts from registers)
• Company name officially registered address and tax number
• Information about the place of creation of a legal entity – country, city
• The date of creation of such a legal entity
• Social insurance number
• Information about the owners (passports, places of registration)

What loans can be granted?

A loan for commercial real estate is an opportunity to buy real estate for business, granted for a term of up to 10 years (with payment terms) or up to 15 years (with full amortization).

Interest rate – 5.25%

The amount is USD 25,000

Requirements – minimum 2 years in business and annual revenue of at least $250,000

Loans for business equipment – issued for the purchase of tools and equipment necessary for work. This loan is granted for a period of up to 5 years – secured by business assets.

Interest rate – 6.25%

The amount is USD 25,000

Requirements – a minimum of 2 years in business, as well as an annual income of at least 250,000 USD

Secured Business Line of Credit – Support current operating expenses with a line of credit, usually secured by the total security of your assets or a certificate of deposit. Loan terms: renewable with annual renewal

Interest rate – 5.25%

The amount is USD 25,000

The requirement is a minimum of 2 years in business and annual revenue of at least $250,000

Our services are priced from 200 euros per consultation and subsequent support.