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A Small Business Administration SBA 504 loan is an attractive financing solution for many business owners. There are several key benefits to the SBA 504 loan that you should consider when planning for the growth of your business.
1. Low Down Payment
By using a SBA 504 loan, you only need 10 percent down to purchase the equipment or asset that you need. Many lenders require a substantial amount more be put down in order qualify for a standard business loan.
2. Longer Loan Term
The SBA 504 loan can be fixed for up to a 25 year term of repayment. Most business loans are for a much shorter term, so if you need to refinance your interest rate may increase depending on what the current market rate is at the time.
3. Long Term Planning
Since the SBA 504 loan is for a longer term at a set rate, if you are planning on adding to your assets in later years you will not have to worry about where rates are headed. This can allow you to invest any surplus funds in longer term growth investments, rather than short term products that provide little return.
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