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Guide 5 min read
SBA vs. Conventional Loans
A side-by-side comparison to help Michigan business owners choose the right financing path.
SBA Loans
- Government-backed guarantee reduces lender risk — enabling lower down payments (as low as 10%)
- Longer repayment terms — up to 25 years for real estate, 10 years for equipment and working capital
- Competitive interest rates — typically Prime + 2.75% or lower
- Ideal for: startups, businesses with limited collateral, or buyers needing maximum leverage
- Timeline: 60–180 days due to SBA review and approval process
Conventional Loans
- No government guarantee — lenders rely on collateral, cash flow, and credit strength
- Faster closing — typically 30–60 days for commercial real estate
- More flexible underwriting — lenders can customize terms to the deal
- Ideal for: established businesses with strong financials and significant collateral
- Down payment: typically 20%–35% depending on property type and borrower profile
Which Is Right for You?
- Choose SBA if you need lower down payment, longer terms, or are acquiring a business
- Choose Conventional if you need speed, flexibility, or have strong collateral and cash flow
- Not sure? Schedule a free consultation — we'll review your situation and recommend the best path
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