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When it comes to securing financing for your business, the SBA 7A loan is one of the most popular options. But many entrepreneurs and business owners wonder: Can you get a fixed rate on an SBA 7A loan? Stability in loan payments is crucial for financial planning, and in this article, we’ll break down the options available for borrowers looking for fixed-rate SBA 7A loans.
Understanding Fixed-Rate SBA 7A Loan Options
Many banks offer fixed-rate options for SBA 7A loans, but there are some important caveats to keep in mind:
- Commercial Real Estate Involvement: Most banks that offer fixed-rate SBA 7A loans do so only when there is commercial real estate involved in the deal.
- Bank-Specific Policies: Not all banks offer fixed rates. In fact, out of the top 10 SBA lenders, only about 50-60% provide fixed-rate options.
- Variable Rate Considerations: Many SBA 7A loans are structured with variable interest rates, often tied to the Prime Rate plus a margin.
How Do Fixed-Rate SBA 7A Loans Work?
Banks that provide fixed-rate SBA 7A loans often structure them differently. For example, some banks may offer a Prime Rate fixed for the first two years before shifting to a Prime +1% structure. Other banks may have fixed-rate options that depend on the deal type and risk level.
However, not all fixed-rate loans are created equal. Just because a bank offers a lower margin doesn’t always mean it’s the best choice. Some banks with low rates have more stringent underwriting requirements, making it harder to get your loan approved.
Finding the Right Lender for a Fixed-Rate SBA 7A Loan
Each lender has different strengths when it comes to SBA lending. Some specialize in business acquisition loans, while others focus on commercial real estate or franchise financing. Working with an experienced SBA loan broker or financial advisor can help you navigate the process and connect you with the right lender for your situation.
At our office, we specialize in helping business owners:
- Package loan applications for the best chance of approval
- Match with lenders that align with their needs
- Streamline the process by working directly with Business Development Officers (BDOs) who specialize in SBA lending
If you need assistance finding the right lender, you can book a consultation at BookWithBeau.com.
Join the Business Ownership Academy for More Insights
We are also launching an exclusive business community to help entrepreneurs connect, learn, and grow. At Business Ownership Academy, we’ll provide:
- Educational resources on SBA loans and financing
- Insights from bankers, franchise experts, and business owners
- Case studies on successful business acquisitions
- Networking opportunities and mastermind events
If you're looking to take your business knowledge to the next level, join us at BusinessOwnershipAcademy.com.
Final Thoughts
While fixed-rate SBA 7A loans are available, they are not guaranteed across all lenders. The key is understanding your business needs and working with the right lender that aligns with your financing goals.
If you have any questions about SBA loans or need guidance on finding the right financing solution, feel free to reach out. And don’t forget to subscribe to our channel for more expert insights on business financing!