SBA LOANS.(Small Business Administration)(Brief Article)

FEDERAL LOANS FOR SMALL BUSINESSES

* What are they?

U.S. Small Business Administration (SBA) loans are federally backed loans for small businesses and usually range from $100,000 to $750,000. The SBA guarantees between 70 percent and 90 percent of the loan.

Lenders can continue to finance larger amounts, but they will be guaranteed only to a $500,000 limit.

SBA loans are normally repaid in equal monthly installments that include both principal and interest, although there is some flexibility that will help meet borrowers' cash flow and financial needs. The SBA sets maximum allowable interest rates, usually between 2.25 percent and 2.75 percent over the lowest Prime rate published in The Wall Street Journal on the day the loan application is received by the SBA. However, a borrower can …