SBA Loans

SBA Financing Brings Dreams to Reality For Small Business Owners

Many small businesses have trouble qualifying for commercial loans due to a lack of sales history or a low credit score. For companies seeking low interest rates and favorable terms, the Small Business Administration offers loans to cover a variety of expenses and capital investments. Rather than funding these loans directly, the SBA instead guarantees the majority of the financing. Usually, up to 90 percent. In some cases, we have been able to secure 100% finaning.

Learn More About SBA Loans

When a small business has difficulty qualifying for a traditional commercial loan, it may turn to the Small Business Administration. Most SBA loans come in the form of a 504 or 7(a) loan obtained through a Certified Development Company or CDC. The CDC handles the application process and the SBA operates as a cosigner.
The SBA has a vast network of licensed lenders to provide funds. Depending on the type of loan issued, a business can borrow up to $5 million. Here’s a quick overview of the two most common loans provided by the SBA.

7(A) Loan

This financing is the most widely received because they can be applied to working capital. These costs can include utilities, payroll, outstanding invoices and more. These loans are issued for up to $5 million with no minimum. They mature at 10 or 25 years, depending on use

504 Loan

These loans are strictly for real estate expenses. A 504 loan has a minimum borrowing amount of $125,000 and a maximum of $5.5 million. These loans have a 20-year term.

Loan Highlights

The SBA doesn’t finance the loan directly. Instead, it works with qualified lenders and guarantees up to 90 percent of the funds.

The two most common loan types are 7(a) or 504 loans.

Companies with at least two years of sales history will have to make a down payment of 10 percent. Startups have to cover 15 percent of their loan

Real estate loans can have repayment terms of up to 25 years. If a company buys equipment, the maximum time is 10 years

SBA Loans Pros and Cons

SBa loan Pros:

It’s easier to qualify for an SBA loan than other forms of commercial financing

Repayment terms and interest rates are more favorable for these loans.

A 7(a) loan is highly flexible regarding how the money can be spent

SBa loan Cons:

Most loans require at least two years of documentation.

Contact us to learn more about SBA loans

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