SBA 7(a) & 504 Loans
If you’re a small business owner who’s been turned down for financing before, a Small Business Administration loan can get you the financing you seek. Our SBA-certified lenders know the challenges small business owners face and provide the right solutions.
What are SBA Loans?
The purpose of the U.S. Small Business Administration is to promote the success of small businesses. They help grow local economies, create jobs, and support communities. To help small businesses secure the financing they need, the SBA works with lenders to function as a guarantor. That encourages lenders to offer financing when they might otherwise hesitate.
Two of the most popular SBA loans – the 7(a) and the 504 – have similar qualifications. To get either loan, your business must be a for-profit operating in the United States. Your net annual income cannot exceed $5M and your business’s net worth has to be less than $15M. Certain restrictions apply to businesses focused on gambling, speculation, lending, and religious education.
Targeted: SBA 504
SBA 504 loans must be used for an explicit business expense such as a real estate purchase, equipment purchase, or construction project. Each loan type has its own maturity period and interest rate.
Versatile: SBA 7(a)
SBA 7(a) loans are used for real estate, equipment, and construction the same way that 504 loans are. However, the 7(a) loan may also be used for working capital, which makes it a more flexible option.
Advantages of SBA Loans
- Use loans for real estate, construction, equipment, or working capital.
- Interest rates are regulated by the SBA.
- No balloon payments due at the end of the loan term.
- Advantages for women and minority-owned businesses.
Frequently Asked Questions
When is an SBA Loan not a good fit?
Private clubs and certain other types of businesses do not qualify for SBA loans. If your business type is ineligible for SBA financing, we can help you explore options until you find one that works for you.
Can I apply for a loan directly with the SBA?
No, the SBA doesn’t offer direct loans. That’s why it’s important to connect with a qualified lender in our network. We have strong relationships with CDC lenders and other private lenders well-versed in SBA requirements.
Does the SBA offer other loans?
There are variations on the SBA 7(a) loan as well as minority-focused financing. If you’d like to explore more SBA financing, contact our office.
What if my small business is a non-profit?
SBA loans are exclusively for for-profit businesses. However, there are other financing options available to non-profits and NGOs. Let us help you find financing that matches your mission.