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SBA Loans

Access funds at some of the best interest rates in the lending industry.

SBA Loans Overview

The federal government supports American small businesses through the Small Business Administration. Since many lenders see small businesses as high-risk, the SBA works to guarantee loans and reduce that risk. This encourages lenders to fund small business loans they might otherwise have declined.

Through various programs, the SBA helps provide loans for real estate, equipment, construction, working capital, and more. Small businesses that have faced challenges seeking funds from traditional lenders may be eligible for financing from the SBA. The Administration offers a boost to minority and women-owned businesses as well as disaster relief and microloans.

Companies with $15M or less in net worth and $5M or less in annual net income qualify as a “small business” through the SBA. Exclusions apply to certain types of businesses like real estate brokers, casinos, religious organizations, and rare coin dealers. Speak with your broker for details.

How to Effectively
Apply Funds

Although the SBA has several financial programs, the two most often utilized by small businesses are the SBA 7a and SBA 504 loans. Depending on which you decide to take out, you can get funds to buy property, start development, update equipment, or handle day-to-day obligations. Under certain circumstances, you can also refinance an existing loan.

The SBA 504 loan is available with a fixed interest rate and terms of 10, 20, and 25-years depending on the purpose of the loan. Expect to pay a 10% down payment on any 504 loan. Businesses can borrow up to $20M, with a minimum loan amount of $125K. Loan fees are a flat percentage and no outside collateral is required.

The SBA 7a is a little bit different, even though it comes with the same minimum and maximum loan amounts. Unlike the 504 loan, you can use the 7a for working capital. Fixed and variable rate 7a loans are available. Borrowers can also combine working capital with real estate into one 7a loan.

SBA Loan Options

Buy Real Estate

Both SBA 7a and 504 loans can be used to help your business buy or build real estate. They have some of the lowest interest rates around, which makes taking the time to apply worthwhile. Your broker will connect you with a private lender or Certified Development Company to service the loan.
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Get Equipment

Either loan will help you get the equipment you need for your small business. Rates are fixed for the 504 and fixed or variable with the 7a. Both 7a and 504 have 10-year terms. Bring in new equipment for as little as 10% down, even if your credit score is low.
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Boost Working Capital

The SBA 7a loan offers working capital for qualifying businesses so you can keep up with day-to-day expenses. With terms of 5-7 years and low variable interest, the SBA 7a is an affordable way to address payroll, materials, and utility expenses. You can even add working capital to a loan for real estate or construction.
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F.A.Q’s

Q. How do I get my SBA loan approved?
Your chances of being approved for an SBA loan increase greatly if you take the time to submit complete and careful documentation. Sending everything in correctly the first time eliminates most of the back and forth of the application process. Engage the services of a qualified broker to help you choose the right lender.
Q. What are the minimum requirements for an SBA loan?
To qualify for an SBA loan, your business has to have less than $5M in net annual revenue and employ fewer than 500 people. Net worth is limited to $15M. Some business types are excluded, so make sure to check your business’s eligibility before you apply.
Q. How long does it take to get an SBA loan?
SBA loans are a second chance for many small businesses to get funding. But, the process does take some time. Expect roughly 30-60 days for the loan to process, depending on the lender. The SBA does have some express loan options that allow you to fast-track your application for a fee. Ask your broker to learn more.
Q. Can I refinance an SBA loan?
Yes, in some circumstances, you’re allowed to refinance a loan you received through the SBA. You must show the current loan is not on reasonable terms, you’ve made 36 months of on-time payments, and the new terms would be of substantial benefit to your company. Consult your professional broker for further details.

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