Financing a startup or an existing enterprise can be straightforward if you have the money at hand. However, if you are low on finances, the most viable option is to get funding from a lender. SBA 504 loans have become a common go-to financial solution for many entrepreneurs. So, why should you be left behind? Nonetheless, you need to understand the pros and cons of this funding, as explained below.

The Pros

Lower Interest Rates

This funding comes with fixed interest rates, which is advantageous, considering that you can get up to 20 years to repay the debt.

Higher Loan Amounts

With SBA 504 loans, you get a higher amount than you would with a traditional bank loan. The amount you get from this financing can cover up to 90% of whatever project you undertake.

No Stringent Qualification Requirements

The government supports SBA loans. This means most lenders are willing to give out this type of funding because they are sure of getting their money back, whether you default or not. That means you do not have to go through a stringent process to get your loan approved.

Longer Repayment Period

When you get a 504 SBA loan, you can be sure about enjoying the longest repayment period you can get with any other type of financing. As such, it will not disturb you to know that you have a debt anywhere. You can go on with your business operations and still manage to earn a thing or two.  

The Cons

You Are Not Limited On Usage

One thing you may never want after getting a loan is to be guided about spending it. SBA loans do not allow you that privilege because you cannot use this funding for working capital.

Covering The Extra Costs

You may be excited about the loan covering some parts of your projects, but you should also be prepared to cater to the rest. That means, if the SBA 504 loan covers 90%, you will have to cater for the remaining 10%.

Getting enough money to run a business is not an easy thing. That is why WCK Financial is there to take you through all the steps of the process to ensure your enterprise takes off the ground and becomes successful.