Financing -- Loans/Business Loan for a small business
Expert: Michael Pechony - 2/21/2014
Question I am wondering how do banks determine what interest rate is determined for each small business looking for a loan. Is there a formula that takes into account the credit of the owner, the assets, alternative incomes, prime interest rate, some other indices? What is current lowest possible interest rate you can get as a business (with the best qualifications)?
Answer Hello Rami,
If you are talking about SBA guaranteed loans those are usually PRIME+2.25% to PRIME + 3.00 today. PRIME rate today is 3.25%.
Yes everything is considered when determining qualifications and rate - loan amount, credit score, type of asset collateral, floating or fixed rate, leverage, industry, borrower experience.
Commercial loans through Banks, Fannie Mae, Freddie Mac, USDA, SBA, HUD, Life Companies, CMBS, Private Lenders, Specialty Lenders.
I would be glad to answer questions about acquisition or refinance of a business, equipment financing, obtaining a line of credit, bridge and permanent financing for investment property such as multifamily, mixed use, owner occupied, student housing, hospitality, NNN, and retail
Principal at Anchor and Anvil, a boutique commercial financing firm.
Senior Vice President of American Street Capital - commercial real estate financing firm.
Managing Partner at Investment Street Capital - business financing firm.
Education/Credentials Northeastern Illinois University