Understanding Income-Driven Repayment Plans for Student Loans

Do you have a student loan still weighing you down? If so, there’s a chance you are struggling with payments. In matters relating to federal student loans, deciding on how to pay it off is essential. It can make a huge difference in your school life. Securing a student isn’t as challenging as planning the repayment. However, there are numerous ways to pay off the federal student loans. Choosing a government income-based repayment plan can bring relief. One of the common repayment plans you may opt for is an income-driven repayment plan. This move can actually make it easier to repay the student loan.

Instead of relying on the standard repayment plan of 10 years, why not try this option? The IDR plan gives borrowers a significantly lower monthly payment depending on their income, the type of loan, family size etc. It’s a much better option than getting a debt consolidation loan from the personal loan apps. The IDR plan is usually lower than the standard repayment plan. At a glance, income-driven repayment plans have benefits. But, it is important to understand how it works and the pros and cons.

What Does Income Driven Repayment (IDR) Means?

Also called the income-related plan, the IDR plan is often used to make federal student loan payments easily affordable. However, remember that the IDR plan only applies to federal student loans; a private NBFC loan used for your education expenses isn’t applicable.

  • There are different types of IDR plans. They include;
  • Income Contingent Repayment (ICR)
  • Pay As You Earn (PAYE)
  • Income Based Repayment (IBR)
  • Saving on Valuable Education (SAVE).

All these repayment plans are different in various details and requirements for a person to qualify. For instance, the discretionary income is taken into account, repayment terms, etc.

How You Can Apply for an IDR Plan

Before you are allowed to apply for the student loan income-based repayment plan, you should submit an IDR request to be accepted first before going ahead with the plan;

Step 1: Head to the Federal Student Aid Government site and log in or sign up. To create the account, you will have to provide a Social Security Number and a contact number or an email.

Step 2: Choose the plan type you need to apply for. You can select the IBR/PAYE/ICR/SAVE.

Step 3: Feed in your personal details and spousal details.

Step 4: Next, enter the income details and the size of your family.

Step 5: After that, submit the information and wait for the assessment.

Make sure you update your income and personal details every year. The federal government will then assess if you can qualify for the plan you requested and give you a lower monthly amount you should pay as per your situation.

 Pros of IDR Plans

The IDR comes with many benefits for those who qualify. Many would like to consider learning these pros before making the decisions. The benefits range from helping unemployed individuals to offering the needed flexibility to aid you in dealing with unplanned situations. These are the main benefits of the IDR plan;

Helps unemployed persons

IDR plans are an awesome option for those borrowers who’re yet to get employed and are going through economic hardships deferment, already exhausted the eligibility for the unemployment deferment etc. The plans will come in handy for a borrower after a payment pause and when the interest waiver has expired. Because the plan’s payments are usually dependent on the income you are earning, the payment might be zero if you have no income.

Monthly payments are low

IDR plans to give borrowers affordable student debt repayments. The payments are usually based on discretionary income. Normally, the repayment plans offer the borrower a lower monthly payment. In general, a borrower may qualify for a lower loan payment with a plan if their loan debt at the time of graduation is more than the annual income.

The balance is forgiven

Usually, the remaining debt is forgiven after some years of repayment, which is often after 20 to 25 years. However, the term of repayment will depend on the type of IDR. For ICR and IBR, the term of repayment is 25 years. This also applies to borrowers who graduate with loans under the SAVE type.

As for the PAYE, the term of repayment is normally 20 years. It also applies to borrowers with undergraduate loans for the SAVE type. This balance is always taxed, but if you are eligible for a public service loan forgiveness, you won’t be taxed.

Unlike the NBFC personal loan, the balance on student loans can be easily forgiven under the IDR plan. It offers tax-free loan forgiveness to students after 10 years if the borrower qualifies for the public service loan forgiveness.

Credit score isn’t affected

The IDR plan doesn’t affect the credit score of borrowers. As long as the borrower makes the agreed monthly payments, it is reported on their credit reports. Even if the payment is zero, it will still be stated in the reports. This will not affect your score, but being responsible with payments is the best thing to do.

Cons of IDR Plans

Here are the downsides of taking part in IDR plans for student loans;

You may pay more interest

Even though the small payments are good budget-wise, they could mean paying more on interest over the loan life. As time goes by, you will be accruing more interest.

The loan can take longer to repay

Since you are paying a lower amount every month, it may take a long period, about 10 years, with a standard repayment plan before you finish paying the debt. Currently, the IDR plans have stretched the repayment for over 20 years.

More paperwork is needed

Unlike the instant loan without documents, IDR plans involve a lot of paperwork. First, you need to apply the IDR plan and be assessed before you are granted the request. You also need to recertify your income after every 12 months. All these needs proper and lots of paperwork.

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Benefits Of Hard Money Loans

Hard money loans are asset-based loans made to investors to finance their acquisition of a property or for new construction. Hard money lenders specialize in these types of loans, as conventional lenders generally do not offer them. These types of loans are short-term and typically carry a term of 12 months or less, though some can be longer. The maximum loan term depends on the lender.

Hard money loans are usually secured by real estate, with the value of the collateral property being equal to or higher than the amount owed on the loan. Like all other types of real estate loans, hard money loans have an interest rate and closing costs that the borrower must pay. These interest rates are usually much higher than those charged by banks since hard money is riskier. However, borrowers who use hard money save on time and paperwork because it is a far quicker process than most conventional bank financing options.

Here are reasons why hard money loans stand out;

They are easy to qualify for

Hard money loans are easy to qualify for. Unlike traditional loans, hard money loans are based on the asset rather than the borrower’s credit. The borrower only needs to prove that they can pay the loan back. Hence, hard money is a fast way to get approved for a loan since it takes less than 24 hours to get approval on a hard money loan.

A less rigorous underwriting process

Hard money loans are known for having a reasonably rigorous underwriting process. With most hard money lenders, the property itself is used as the only collateral on loan. As a result, lenders can process hard money loan applications more quickly than traditional loans. Investors can obtain funding in a matter of weeks rather than waiting several months for a bank to make a decision.

They offer fast funding

The first of the benefits of hard money loans is that they offer fast funding. The speed at which you can get a hard money loan into your hands is one of the main reasons why borrowers consider them over traditional bank loans. While a traditional lender may take weeks or even months to decide, you can get a hard money loan in hours or a few days with some lenders. This is because hard money lenders in Kansas City MO, don’t go through an extensive background check like banks do and instead focus on the profitability of the investment for which you need funding.

However, it’s important to note that not all hard money lenders are fast. Some may take weeks before they can approve your loan request. Additionally, even though most will be quick to give you their decision (approval or rejection), it may take longer than three days for them to actually fund your loan (and sometimes they will fund two separate chunks). It all depends on the lender. So, it’s important to enquire about their loan approval period before starting the process.

Hard money lenders do not concentrate on the borrower’s debt-to-income ratio and credit score

Hard money lenders do not concentrate on the borrower’s debt-to-income ratio and credit score. Instead, they focus on the value of the property being purchased and its future value after it has been rehabbed. If you have bad credit or no income, that is not an issue with hard money lenders.

The cost is not prohibitive

One of the biggest reasons why a hard money loan is such an attractive option is that the cost is not prohibitive. A hard money loan will typically be more expensive than a traditional loan. However, they are much less expensive than many other alternative loans. As mentioned above, there are no restrictions on the use of the funds when using a hard money loan. This means you can use it for all aspects of your business and development project by leveraging your real estate assets as collateral.

A solid business plan and exit strategy are important with any loan, and this holds true with a hard money loan as well. It’s essential that you have these things in place before approaching any lender to ensure the best chance of being approved for your funding request.

You can use them for many projects

Hard money loans can be used for a variety of real estate investment projects. The main project types are fix and flip, fix and rent, and new construction.

  • Fix-and-flip investing involves purchasing a property with the intention of repairing it to increase its value before selling it. This type of project is often funded with hard money loans because they are designed for shorter time spans than conventional loans.
  • Fix-and-rent investing is similar to fix-and-flip investing, but instead of selling after repairs, you rent out the property.
  • New construction projects typically involve building or renovating an entire residential structure from scratch.

Hard money loans are another option for real estate investors who want funding for their investment projects

While hard money loans are designed for real estate investors, they can be a good alternative to traditional financing if you have an investment project in mind. A hard money loan is a short-term loan that’s secured by the value of the property (not your credit score). Interest rates are higher than traditional loans because it’s assumed that you’ll use the funding to improve the property and sell it quickly for a profit.

The main benefit of hard money loans is how fast they are compared to bank loans—hard money lenders can make approvals within days, not weeks or months. This speed is especially convenient when buying at an auction or in a short sale situation, but it also helps with renovations too.

Hard money is generally used for buying or renovating properties, which means that both home flippers and real estate developers can take advantage of this type of financing.

Key Takeaway

Real estate investors, real estate professionals, and homeowners can now access a new hard money loan product offered by leading hard money lenders in the industry. Most of these lenders offer their own private equity loans to borrowers who want to finance investment property or refinance their existing mortgages. That said, if you need a hard money loan, look for a reliable hard money lender near you today!

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The Biden administration may be signaling another student loan freeze extension

The Biden administration may be signaling another student loan freeze extension

Student loan payment pause could be extended past May.

Good news for the 37 million Americans who have May 1 marked on their calendar with a skull: The Biden administration has signaled the possibility of once again extending the federal student loan payment freeze.

  • The Dept. of Education emailed the companies that service federal loans and told them to hold off on reminding borrowers that payments would start again in May.
  • White House Chief of Staff Ron Klain hinted that another extension was possible on Pod Save America.

If the student loan freeze were a band, this would mark its sixth straight encore—something that could make you wonder, “Why not turn this thing into a residency?” The legislation has saved federal student loan borrowers about $195 billion since it was implemented at the beginning of the pandemic, according to a new report by the Federal Reserve Bank of New York.

If forbearance were to end, NY Fed researchers predict a steep rise in delinquencies. With midterms looming, Democrats have urged Biden to push ahead with his campaign pledge to cancel a “minimum of $10,000” of student loan debt per person—or at least extend the freeze.

Not everyone’s celebrating, though. Private lenders, whose profits have been squeezed during the moratorium, have been aggressively lobbying the administration to restart payments or narrow the freeze to cover fewer borrowers.—MK

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Extend Student Loan Pause To 2023? Biden May Do It.

Extend Student Loan Pause To 2023? Biden May Do It.

A top Democrat is urging President Biden to extend the ongoing student loan pause — and there are growing signs that Biden might do it. Here’s the latest.

Student Loan Payments Have Been Pause For Two Years

Most federal student loan payments have been suspended since March 2020. President Trump initiated a brief payment pause for student loans in response to the Covid-19 pandemic, which was then codified into law by Congress through the CARES Act. That legislation also temporarily set most federal student loan interest rates to zero, and stopped all collections efforts on most defaulted federal student loans.

The CARES Act’s relief was originally supposed to last six months. But as the pandemic and economic fallout expanded, President Trump extended the relief several times. President Biden followed suit and extended the relief again when he took office. Now, most federal student loan borrowers have not had to pay anything on their loans for over two years. Biden’s most recent extension is scheduled to end on May 1, 2022.

Advocates Urge Biden To Extend the Student Loan Pause Again And Enact Student Loan Forgiveness

A growing chorus of advocacy organizations and elected officials are urging the Biden administration to extend the pause again.

Earlier this month, a coalition of 210 organizations including civil rights groups, labor unions, and borrower advocates sent a letter to President Biden urging him to extend the payment pause. “The student loan payment pause has been one of the most important investments the federal government has made in Americans’ financial lives in a generation,” wrote the coalition. “It is critical that your administration continue to deliver on your promises made to student loan borrowers and their families.”

Last week, Senator Patty Murray (D-WA), Chair of the powerful Senate Committee on Health, Education, Labor, and Pensions, called on Biden to extend the student loan payment pause to 2023. Citing ongoing economic pain experienced by millions of Americans due to rising costs, Murray also urged Biden to use the extended pause to fix the student loan system by creating a new, more affordable income-driven repayment plan, automatically bringing borrowers out of default, and enacting broad student loan forgiveness for key borrowers.

“This loan system is unacceptable and we can fix it. When you get a loan to afford higher education, you deserve a system that works. It should be easy to enroll in a sensible repayment plan, no one should end up with a monthly payment they can’t afford, and debt relief shouldn’t require making it through a gauntlet of paperwork,” said Murray in a statement last week. “This is not too much to ask — so until we fix our student loan system, the student loan payment pause must continue to provide borrowers much-needed relief.”

Surveys show a majority of borrowers support extending the pause again, and abruptly resuming repayment could potentially impact the midterm elections. A poll conducted last month by Data for Progress suggests that borrowers continue to worry about their ability to resume repayment, and over six in ten respondents expected “major changes” to their savings or spending habits if repayment on student loans restarts this spring.

Growing Signs that Biden May Extend The Student Loan Pause

For weeks, there have been growing signals that the Biden administration may actually extend the student loan pause again. White House Press Secretary Jen Psaki used the word “if” in February when she was describing when (or whether) student loan repayment would resume this spring. In early March, White House Chief of Staff Ronald Klain expressly said in an interview posted by Pod Save America that Biden is considering a further pause while also potentially exploring additional relief for student loan borrowers, including student loan forgiveness. And as first reported by Politico, the Department of Education quietly instructed its loan servicers this month to stop sending correspondence to borrowers about resuming repayment.

While the Biden administration has not speculated on a specific length or end-date of another extension of the payment pause, extending it to 2023 would get the administration through the midterm elections in November, which could be a consideration.

Still, extending the pause further does not necessarily enjoy universal support. Two House Republicans introduced a bill to force the restart of student loan payments. It has virtually no chance of passing the Democratic-controlled House, but it is indicative of the ongoing debate about how to handle student loan repayment.

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Governments Cause Inflation, Not Banks Making Loans

Governments Cause Inflation, Not Banks Making Loans

Christopher Wynne is a U.S.-born businessman based in Moscow. His company, PJ Western, owns and operates PapaJohn’s Pizza locations throughout Russia. His businesses employ over 9,000 people within the country, which at the very least is hopefully a reminder of who will suffer attempts by foreign nations to make “Russia” pay for the sins of its leader.

Notable about the 45-year old entrepreneur is where the financing for his businesses comes from. According to the New York Times, backers include Alex Ovechkin, the future Hall of Fame hockey star for the Washington Capitals, the Russian private equity firm Baring Vostok, plus a Finnish private equity operation by the name of CapMan.

There are all sorts of businesses and businessmen in Moscow and around Russia since the happy dissolution of the Soviet Union in the 1990s, which on its own renders mention of Wynne’s sources of finance kind of humdrum. Figure that up until Russia’s invasion of Ukraine, U.S. investment banking giants Goldman Sachs and Morgan Stanley could claim substantial commercial activity in Russia. Both announced a pullout last week, but it’s not unreasonable to speculate that their departure will prove short-lived.

What’s useful about the financing of Wynne’s PJ Western and Russian finance more broadly is that it illustrates yet again the global nature of capital. It knows no borders. Where money is treated well (and sometimes where it’s not treated well such that capital commitments are met with impressive rates of return) is the driver of capital flows.

This is worth keeping in mind as monetarist philosophers like Berenberg Capital Markets senior economist Mickey Levy opine oh so predictably on what the Federal Reserve should do about inflation. When it comes to interest rates and capital access, it seems we’re all central planners now. Members of the Right who were plainly influenced by the late Milton Friedman’s mostly free-market views also plainly embrace his embrace of the central bank as capital allocator. Which means Levy isn’t unique in calling for the Fed to “raise rates and take away the accommodative monetary policy that is fueling underlying inflation and rising inflationary expectations.” Please think about Levy’s expressed desires in terms of Wynne.

In doing so, try to remember that the United States isn’t some autarkic island of economic activity as Levy’s models would have you believe. Assuming the Fed can shrink credit access from the banks through which it projects its wildly overstated influence, banks are but a small and shrinking portion of total credit not just in the U.S., but around the world. Stated basically precisely because it’s basic, what the Fed takes will be made up for by market actors around the world. Goodness, assuming the Fed’s rate machinations actually result in more expensive credit (not very likely, but let’s pretend), that would merely mean that the central bank’s actions would create fatter margins for domestic and global capital providers.

But wait, can’t the Fed shrink so-called “money supply” inside banks through sales of interest-bearing assets to banks? Not really. The Fed buys highly marketable and liquid securities from banks, and by extension sells highly marketable and liquid securities to banks when its aim is to reduce their lending. Which is why all the fiddling is so meaningless. If banks find intriguing lending opportunities, there’s a big and liquid market for the securities on their books.

It’s all a reminder that the Fed can’t shrink money and credit availability where each will be treated well. Finance is lucrative. Money and credit follow opportunity. Levy’s alleged solutions to what he deems inflation will achieve much less than nothing. Neither would a reversal of what Levy desires. In other words, the Fed can’t stimulate what isn’t economically viable. Assuming a lack of credible financing options in and around the U.S., Fed fiddling won’t alter this truth. Basically, markets work. While economists continue to try to make markets do as they wish, reality always intrudes. The Fed can’t make Palo Alto a cent poorer, nor can it make East St. Louis a cent richer.

All of which raises a question: if the Fed can’t shrink credit, how can it tamp down inflationary pressures? It’s a useful question. The answer is that credit is produced in the real economy. We borrow money for what it can be exchanged for. Unless the productive around the world stop going to work, credit will always be abundant where it’s treated well.

Which brings us to inflation. Leave it to politicians and economists to blame inflation on lending. What a joke. Why on earth would delayed consumption by one party that is shifted to another party cause inflation? To find inflation in the shifting of resources from one set of hands to near-term better hands to redefine the word. Which is what Levy does. Leave it to economists to blame finance, as opposed to government, for inflation.

The economist also fears “a stock of personal savings” of $2 trillion+ will add to inflationary pressures. Translated, Levy fears a so-called “savings glut.” A non-economist by the name of Henry Hazlitt once marveled that even the ignorant could fear too much savings, but Levy does. Since he does, he wants the Fed to act. Back to reality, savings by their very name never sit idle. Levy would have readers believe $2 trillion has sat dormant only for it to suddenly emerge such that prices soar. Demand-driven inflation! No, and no.

First, no act of saving ever subtracts from demand. Second, demand doesn’t cause inflation in the first place. That is so because all spending is about tradeoffs. If our spending is suddenly focused on airline tickets such that demand outpaces supply and prices rise, that just means we have fewer dollars for other goods and services.

Inflation is a devaluation of the currency. Which means it’s always and everywhere a policy choice entered into by government. And since it’s a policy choice, the solution to what some deem inflation is a stronger, more stable dollar. Nothing more, nothing less. If Treasury wants a stronger and more stable dollar, it need only communicate that. Markets will comply. Indeed, if markets don’t “fight” an outsourced arm of Congress and Treasury (meaning the Fed), they certainly won’t right Treasury on the matter of a more credible dollar.

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Buy Now, Pay Later Loans Will Soon Appear on Credit Reports

Buy Now, Pay Later Loans Will Soon Appear on Credit Reports

Key points

  • All three credit bureaus plan to include buy now, pay later loan data on consumer credit reports.
  • This change could help consumers who use BNPL services improve their credit.
  • With this news, consumers should consider how their BNPL account activity could positively and negatively impact their credit.

Buy now, pay later (BNPL) loans are increasing in popularity because they offer a convenient way to pay for larger expenses over time. These loans haven’t previously been reported on consumer credit reports. But that’s about to change.

Buy now, pay later loans are attractive. Some of these loans offer a limited-time 0% interest, while others offer low interest rates. Consumers can pay off the debt in regular installments and spread out the cost of expensive purchases.

Since many BNPL services don’t perform a hard credit pull for approval, this is an excellent lending option for people with minimal credit history. It can be more difficult for these consumers to get approved for other financial products, like credit cards.

We conducted a survey to examine the popularity of BNPL services. We found that over half of Americans have used BNPL loans and these services continue to increase in popularity.

Typically, these loans haven’t shown up on credit reports. However, all three credit bureaus have recently announced plans to include buy now, pay later payment and account data and activity on consumer credit reports. But this won’t be an overnight change.

Here’s why BNPL loan data hasn’t been reported sooner

BNPL service activity typically hasn’t been reported on credit reports because this type of data doesn’t fit in well with the current system, which analyzes revolving credit and long-term loans like mortgages and car loans.

Since BNPL services are installment loans, some consumers take out multiple BNPL loans per year. With most current credit models, taking out multiple BNPL loans could be viewed as risky. Because of this, including such activity on credit reports could penalize consumers.

But industry experts believe that consumers should be able to benefit from using BNPL services and have the chance to improve their credit by making responsible choices with these loans. This includes making regular, on-time payments and paying off BNPL loan balances.

While the credit bureaus will soon report this data, they want to take steps to protect consumers from the potential immediate negative credit impact of including such data without first adjusting the current system.

It will take time for the industry to adjust and make room for BNPL loans — so consumers shouldn’t expect instant changes.

What to expect from all three credit bureaus

Eventually, all three credit bureaus will report some BNPL data, but how they handle that data will vary. Here’s what we know so far:


Experian plans to debut its own product, The Buy Now Pay Later Bureau™, in spring 2022. This product will include essential BNPL account data. At first, BNPL data will be stored separately from Experian’s core credit bureau data and it can be requested by lenders.


During the first quarter of 2022, Equifax will formulate a standard process for including BNPL data in traditional consumer credit reports. This includes implementing a new business industry code used to classify the industry. The long-term plan is to include this data in regular consumer credit reports.


TransUnion recently introduced its own new BNPL credit reporting service, called Point-of-Sale Suite Solutions. The credit bureau will include BNPL data in its reports. This data will appear on a separate portion of credit reports and will be made available to lenders.

What this means for consumers

If you use BNPL services, you can expect relevant data to appear on your credit report sometime soon. While it may not happen right away, it will eventually be a reality.

For consumers who are new to building credit, including BNPL in their credit report could offer a way to establish credit and improve their credit score. But to benefit, consumers will need to make responsible choices like making on-time payments.

No matter what personal finance tools you use, it’s important to make smart choices and be cautious. Do your best not to ignore debt, make late payments, or miss payments.

BNPL loans can be beneficial, but they can cause you financial stress if you’re not careful. Only take out BNPL loans if you can afford to make regular payments without ignoring your other financial obligations. Always consider how your actions will impact your financial wellbeing.

If you’re looking for tips and guidance on how to improve your finances, check out our personal finance resources.

The Ascent’s Best Personal Loans for 2022

The Ascent team vetted the market to bring you a shortlist of the best personal loan providers. Whether you’re looking to pay off debt faster by slashing your interest rate or needing some extra money to tackle a big purchase, these best-in-class picks can help you reach your financial goals. Click here to get the full rundown on The Ascent’s top picks.

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Century Bank: SBA 504 & 7(A) Loans Help Businesses Succeed

Century Bank: SBA 504 & 7(A) Loans Help Businesses Succeed


The U. S. Small Business Administration (SBA) assists small businesses in several ways, especially in helping them to obtain funding for many of their needs.

Century Bank Senior Vice President Fran Lesher and Century Bank Vice President David Valdez are both local commercial bankers. As local bankers they are committed to helping businesses thrive and grow.

Together, they explain how two Small Business Administration loan programs can help New Mexico small businesses finance growth.

The following questions and answers about the 504 and 7(a) loan programs show how beneficial these loans can be in helping small businesses succeed:

What are SBA 504 and 7(a) loans?

Either of these Small Business Administration programs are good options for business owners to conserve their equity and working capital, or when they don’t qualify for conventional financing. Either can be for purchase or improvement of real estate, including existing buildings or land, constructing new facilities, or purchasing machinery and equipment. The 7(a) loan can also be used for short-term or long-term working capital, the purchase of furniture, fixtures and supplies, the purchase of an existing business or refinancing of current business debt.

With traditional bank financing, businesses in most cases contribute as much as a 20 percent down payment. With the 504 program, used for fixed assets and real estate, businesses usually only need a 10 percent contribution with the bank financing 50 percent of the total loan amount. A local Certified Development Company (CDC) coordinates the remaining 40 percent with the SBA, as part of its mission to promote economic development within the community. These loans are usually capped at $5 million, with some exceptions.

In the 7(a) program, the SBA asks a minimum 10 percent down payment from the borrower, and can go as high as 30 percent. The maximum 7(a) loan is $5 million. Qualified applicants can also obtain a line of credit up to $500,000 under the 7(a) express loan program.

Who qualifies?

For a business to be eligible for an SBA 504 loan, it must have net worth of less than $15 million, with net income of less than $5 million. For 7(a) loans, annual sales maximum vary by industry, and generally cannot exceed $33.5 million. Other standards for both loans include qualifying within SBA size guidelines, having appropriate management expertise, a feasible business plan, good character, and the ability to repay the loan. Certain kinds of businesses, as well as nonprofits, do not qualify for either loan.

Why consider these SBA loans instead of a traditional loan?

In addition to the lower equity requirements, SBA-guaranteed loans have more favorable rates and terms because they are backed by the federal government. Interest rates can be lower than the bank’s market rate, and terms can usually be extended longer than bank financing. Banks also typically use past cash flow in traditional lending, while the SBA allows reasonable and quantifiable income projections to underwrite 504 and 7(a) loans. Using projections can be a big advantage for a startup company or a growing, established business. They could typically qualify for SBA financing, where they might not qualify for a traditional loan based solely on past financial statements.

Why choose Century Bank for a 504 or 7(a) loan?

As an SBA partner, Century Bank want its customers to succeed, grow and create jobs in the local community. Century Bank’s track record of working with hundreds of New Mexico companies through the SBA program shows that their success means its success. To discuss whether an SBA loan is right for a business, contact a Century Bank loan specialist today.

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