SBA and Hard Money Loans

SBA loans are small-business loans guaranteed by the SBA and issued by participating lenders, mostly banks. The SBA can guarantee up to 85% of loans of $150,000 or less and 75% of loans of more than $150,000. The agency says its average loan amount was about $375,000 in 2016

A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans, starting at 7.7%, because of the higher risk and shorter duration of the loan.

  • Loan amount is case by case and depends on the request
  • Up to 75% LTV (Loan to value of collateral)
  • Programs range from 1 year to 25 years
  • Cost for a SBA loan is between 3.99% and 4.36% annually
  • Cost for a hard money loan is between 4.65% and 12% annually
  • Payments made monthly by check
  • No open bankruptcies and no tax liens
  • Minimum $25,000 gross monthly volume is required
  • Minimum 3 years in business required
  • Interest can be written off in business taxes using a 1099-INT form
  • Minimum 640 FICO to apply with 3 years of tax returns personal and business with YTD financials