Hard Money Loan vs SBA Loan
To schedule a free loan consultation, please call (254) 230-0012 (for loans in Texas) or (503) 222-4466 (for loans in Oregon and other states).
The Small Business Administration (SBA) provides long-term, government-backed loans to small businesses. Facilitated by the SBA, these loans are actually issued and serviced by partnering lending institutions. Known for their lower interest rates and longer repayment periods, SBA loans might seem like the answer if you need funding. But if you’re a real estate investor, an SBA loan might not be the solution that you’re looking for…and we know this from experience.
At TriTalent Funding Group, we’ve stepped in, on more than one occasion, to provide a hard money loan after an SBA loan got delayed or denied, leaving the borrower in a lurch.
If you compare our hard money lending to SBA lending, we have distinct advantages.
Approval Process For A Hard Money Loan vs An SBA Loan
At TriTalent Funding Group, we can approve loans in just a few days. The approval process for an SBA loan is far more rigorous and time-consuming. It can involve checking your business’s financial records, credit history, and business plan. Worse, you might not even find out that you’ve been turned down for an SBA loan until you’re months into the process.
Speed Of Funding For A Hard Money Loan vs An SBA Loan
We can typically provide funding within 14 days. SBA loans can take weeks (or more often, months) to process and fund.
Requirements For A Hard Money Loan vs An SBA Loan
Our loan approval process is primarily focused on the value of the collateral that you’re putting up for the loan, not your credit history or income stream. SBA loans require a strong credit score, a solid business plan, proof of income stream, and collateral.
Rates And Fees For A Hard Money Loan vs An SBA Loan
Our interest rates are 10%-14% on our hard money loans, with fees of 1%-4%. SBA loans typically have lower interest rates and lower monthly payments (because of the length of the loans), but that won’t help if you miss out on an opportunity because it takes so long to get funding from the SBA.
Terms For A Hard Money Loan vs An SBA Loan
We provide hard money loans for one year, and in that time, you only pay interest, not principal. We don’t charge any prepayment penalties for early payoffs. SBA loans have repayment periods of up to 15 years. Generally, there’s no prepayment penalty for SBA loans with terms less than 15 years. But with SBA loans that are longer than 15 years, there could be a prepayment penalty during the first three years of the loan.
In short, SBA loans can be helpful for startup costs, working capital, and business expansion. But when it comes to short-term real estate investments, our hard money loans usually win out, thanks to fewer requirements, quicker approval, and faster funding.
For more information or to schedule a free loan consultation, please call (254) 230-0012 (for loans in Texas) or (503) 222-4466 (for loans in Oregon and other states).
Please note that we provide hard money loans throughout Texas, including: Dallas-Fort Worth, Austin, Waco, and San Antonio. We also provide hard money loans in Oregon, Washington, California, Nevada, and Arizona.