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The Pros and Cons of an SBA Loan

Updated: Jun 4, 2020

An SBA loan is a long-term, low-interest small business loan partially guaranteed by the government. This could be real estate, equipment or machinery, expansion capital, funding the purchase of another business, disaster recovery or even, in some cases, refinancing other debts.

Under the U.S. Small Business Administration’s various “SBA loan” programs, you can borrow money for nearly any business purpose—including adding to working capital, purchasing inventory or equipment, refinancing other debts, buying real estate or even funding the acquisition of other businesses.

Before you apply, understand the pros and cons of an SBA loan....


  • Lowest down payment

  • Longest payment terms

  • Relatively low interest rates

  • Used for a wide variety of purposes


  • Lengthy application process

  • Longer approval times

  • Variable interest rates may increase

  • May require collateral

To learn more about SBA loans, find out what documents you need to apply, and to submit an application visit our SBA Loan Page.

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