SBA loans offer some of the lowest interest rates for small business financing. In the table below, we’ve compared the average cost of a $250,000 SBA 7(a) loan to other types of small business capital.
Type | Interest Rate | Est. Monthly Payment | Term | SBA 7(a) Loans* | 11.25% | $3,479 | 10 years |
|---|---|---|---|
Term Loan | 15% – 45% | $4,856 – $9,821 | 7 years |
Line of Credit | 36% – 99% | $46,150 – $54,490 | 6 months |
Depending on your business’ needs and cash flow, any of these capital options may be appealing.
A line of credit usually offers flexibility, allowing you to draw funds as needed and you’re only charged interest on the drawn amount. Certain lenders may provide term loans very quickly in exchange for higher rates. Both lines of credit and term loans may be good options for immediate cash needs, and in some cases, they can be refinanced by an SBA 7(a) loan.
For most businesses, the SBA 7(a) loan benefits of lower monthly payments with no prepayment penalties can be the best form of growth capital.
Choose your partners wisely in 2024. We’d be happy to help you access capital in the new year for less.
NEWITY’s prescreen application will tell you if you’re eligible for an SBA 7(a) loan in less than 10 minutes without impacting your credit score or requiring any documents.
*SBA 7(a) loans provided through NEWITY’s Portal. Interest rate includes WSJ Prime Rate as of 2/15/24.