SMALL BUSINESS ADMINISTRATION (SBA) LOANS
Designed to help small businesses, the U.S. Small Business Administration (SBA) provides business loans with more favorable terms than conventional loans. SBA loans have less stringent credit standards for longer periods of time and with lower down payments than conventional loans. This allows for smaller companies to preserve their cash for growth or other needs. Our lenders know these loans intimately and can help your business navigate the application process.
What are SBA Loans Used For?
There are two most common types of SBA loans are SBA 7(a) Loan and SBA 504 Loan. Both can be used to finance real estate, construction, and equipment for for-profit companies, but only the 7(a) loan can be used for working capital. Both loans are capped at $5 million and require that the applicants have a net worth of less than $15 million and annual revenues are less than $5 million. Women-owned businesses and minority-owned businesses are encouraged to apply.
SBA 504 Loans
SBA 504 Loans are used to promote job creation. These loans can be used to purchase buildngs, land, facilities, and equipment that can be tied to job growth in your company. You cannot use these loans for debt consolidation or working capital. Lenders for a 504 Loan must be a Certified Development Company, a local lender certified by the SBA.
SBA 7a Loans
If you want to expand your business but won’t meet the 504 job creation requirements, the 7a loan will be a better choice. This is the most common loan because it is less restrictive with eligible expenses of the 504 loan plus working capital, inventory, new buildings, and more.
SBA Loans Can …
>> Encourage lenders to approve small businesses for loans that might not qualify for typical loans.
>> Offer lower interest rates than other loans.
>> Provide up to $5 million in working capital.
>> Provide longer repayment terms with payment schedules that won’t financially strain your business.
Look to one of our lenders to help you qualify for an SBA loan. We have CDC lenders and others authorized to lend through the SBA.
There are types of businesses that don’t qualify for SBA loans We can help you navigate the SBA’s requirements and get the loan that fits.