Which is Better? SBA Loan vs. Commercial Loan

Which is Better? SBA Loan vs. Commercial Loan

When it’s time to look into financing for your business, there are many options to choose from to fit your needs. Two popular options for businesses today include a Small Business Administration (SBA) Loan and a commercial loan. But which one is right for your business?

What are SBA loans?

SBA loans are long-term loans partially guaranteed or funded by the government. Unlike conventional term loans, SBA loans offer business owners the opportunity to take advantage of lower down payments and favorable terms while removing some of the barriers of traditional financing options. These loans can be used to launch or expand your business or franchise, finance or boost permanent working capital, purchase new equipment and more. There are three different SBA loans:

  • SBA 7(A): For borrowers needing to expand business through real estate or business acquisition, or to manage cash flow on loans up to $5,000,000.
  • SBA 504: This is a great option for borrowers planning to expand a business through real estate or building acquisition or construction.
  • SBA Express: For borrowers needing up to $350,000 to expand, purchase equipment or another business, or simply help manage cash flow.

What are commercial loans?

Commercial loans are for businesses and enterprises looking for financing options. There are a variety of commercial loans including:

  • Commercial real estate loans for investment or owner-occupied properties, construction-to-permanent and refinancing
  • Term loans for business vehicle and equipment purchases
  • Revolving lines of credit for short-term solutions for seasonal fluctuating cash demands, capital and inventory purchases

Which one is right for your business?

An SBA Loan is a great option for businesses just starting out or are having some struggles being approved for traditional financing. Meanwhile, if you have an established business looking to expand, a commercial loan could be a better option for you.

Interested in an SBA loan or a commercial loan? Union Savings Bank offers both to local businesses in Connecticut and our expert team of business bankers can help you in deciding which loan option is right for you.

Call us at 866.650.0720 or visit one of our branches.