The Small Business Administration supports American small businesses by working with lenders. The SBA acts as a guarantor to build security into the loan, mitigating lender risk. That enables lenders to consider approving small businesses they may otherwise turn down.
SBA Loans
The Small Business Administration supports American small businesses by working with lenders. The SBA acts as a guarantor to build security into the loan, mitigating lender risk. That enables lenders to consider approving small businesses they may otherwise turn down.
Understanding
SBA Loans
SBA loans can cover most business expenses from working capital to construction and acquiring new businesses. There are two primary loans: the SBA 7a loan and the SBA 504 loan. Only the SBA 7a can be used for working capital. Interest rates on both loans are capped by the SBA, meaning lenders can’t charge more than a certain amount over Prime. Lower interest rates make financing more affordable for small businesses, helping them get the money they need without high costs. To find out which SBA loan is right for your small business, speak with a knowledgeable broker on our team. We’ll help you meet your financial goals.
How to
Effectively Apply Funds
SBA loans have many uses. The type of loan you get depends on what you want to use it for. It also depends on the structure of your business. Some SBA loans are better suited to small businesses with multiple partners. The SBA 7a loan can add working capital to real estate and construction loans, while the SBA 504 doesn’t provide working capital. You can cover real estate and equipment needs with either loan with the same term options. However, one has fixed interest rates while the other has a variable rate. If this looks confusing, that’s because SBA loans can be complex. To find out which loan is best for you and which lender will give you the best deal, speak with a broker today.
Our Services
Real Estate
When you want to invest in property for your small business, look to an SBA 7a or 504 loan to make it affordable. Choose a 20 or 25-year term with a fixed or flexible interest rate. Down payments are as low as 10% with maximum loan amounts at $5M or more. Ask us how SBA loans can help your small business today.
Equipment
SBA loans cover the upfront cost of equipment that many small businesses can’t handle on their own. Equipment financing can come from an SBA 7a loan or an SBA 504 loan with a 10% low minimum down payment. Get up to 10 years and $5M or more toward the cost of onboarding equipment for your small business.
Working Capital
If you need working capital for your small business, use an SBA 7a loan to get what you need. SBA 7a loans cover $5M or more in working capital and have a 10-year maximum term. Interest rates are variable for most loans, but fixed rate options are available too. Just ask your broker for more details.
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F.A.Q’s
Get Informed
Should I get an SBA 7a or SBA 504 loan?
The choice depends on what your individual business needs. For businesses with multiple partners, a 504 loan may offer more downside protection. If you need to roll working capital into your real estate loan, only the SBA 7a will do. Ask your broker to show you which loan is best for your goals.
When is an SBA loan not a good fit?
SBA loans do have eligibility requirements that could be difficult for some businesses to meet. For example, types of businesses that deal with gambling or religious teaching are not eligible for SBA loans. Borrowers with delinquent federal debt (student loans, taxes, etc.) and those with federal convictions are also ineligible. If you don’t meet the SBA’s requirements, ask a broker to show you affordable alternatives.
What is a CDC for SBA loans?
A CDC is a non-profit Certified Development Company that handles SBA 504 loans. To get this type of loan, not just any lender will do. Ask a broker to match you with a CDC in your local area.
What are SBA interest rates?
SBA loan interest rates are capped at a certain number over the Prime Rate. They vary depending on the length of the term and how much you borrow. The Prime Rate is set by the Federal Reserve and is subject to change. Ask your broker for more detail.