The SBA offers numerous loan programs to assist small business owners to start, manage and grow their businesses. Here are some of the most popular SBA loan programs:
7(a) General Small Business Loans
- Ideal for businesses that may not meet the conventional lending collateral or cash flow requirements.
- Real Estate Purchase: Business property financing with loan terms up to 25 years. Must be at least 51% owner-occupied.
- Use: Manufacturing - Showroom - Restaurant - Warehouse. Market - Wrecking Yard - Auto Repair - Gas Station -Machine Shop - Car Wash - Dental & Medical Office - Board & Care – Hotel – Motel - Commercial Land To Build.
- Loan Purpose: Purchase - Refinance - Construction - Remodeling
- Loan Term: 25 years - Fully Amortized - No Balloon Payment.
- Business Purchase: Business acquisition financing with loan terms up to 10 years.
- Debt Refinance: Refinance existing debt with lower interest rates fully amortized with loan terms of 7-25 years.
- Loan To Value Ratio: Up to 90% of the purchase price or the appraised value
- Proceeds can be used to provide long-term working capital to use to pay operational expenses, accounts payable and/or to purchase inventory or to purchase equipment, machinery, furniture, fixtures, supplies or materials or to construct a new building or refinance existing business debt or even to establish a new business.
- 7(a) maximume loan amount is $5 million.
Real Estate & Equipment Loans: CDC/504
- This program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market rates.
- Applicant has a tangible net worth less than $15 million and an average net income less than $5.0 million after taxes for the preceding two years.
- Provides growing businesses with long-term financing for purchasing land, constructing new buildings, expanding facilities, or purchasing long-term machinery and equipment
- No working capital permitted
- Maximum 504 debentures sizes: $5 million for regular loans; $5 million for public policy loans; $5.5 million for small manufacturer loans.
SBA Express Program
- Rates can be fixed but more often variable, and are tied to the prime rate (as published in The Wall Street Journal) , LIBOR, or the optional peg rate (published quarterly in the Federal Register), but they may not exceed SBA maximums.
- Flexible repayment options and longer terms than traditional loans
- Borrow up to $350,000
- Maximum SBA Guaranty is 75%.
- Quick Turnaround - May receive a response to your application in less than 2 days.
- Use the funds for working capital, equipment, inventory, or real estate purchases, or to expand facilities