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What Is A Small Business Administration Loans (SBA)

The SBA program is designed to provide financing for the purchase of fixed assets, ususally real estate, buildings and machinery at below market rates.  As part of its mission to promote the development of business, the SBA offers a number of different loan programs tailored to specific capital needs of growing businesses.

I) The SBA 504 program works by distributing the loan amoung three parties. The business owner puts a minimum of 10%, a conventional lender puts up 50% and a so-called Certified Development Company (CDC) puts up the remaining 40% financing.  CDC are established under the 504 code as non-profit corporations set up to support economic growth in their local areas.  There are a few hundered such CDCs nationwide.

II) The SBA 7(a) loan programs is the SBA's primary program for providing financial assistance to small businesses.  The terms and conditions, like the guaranty percentage and loan amount, may vary by the type of loan.

1) Commercial Real Estate Purchase

  • >= 51% business occupancy
  • First time buyers
  • Operations require expansion
  • Businesses looking for permanent location to save rental expenses or build up equity

Benefits

  • 10% down payment vs 40% required by conventional programs
  • 25 year loan term = save money, time, paper work and hassle in renewal rate

2) Commercial Real Estate Refinance

  • Looking to lower monthly payments & lower interest rate
  • tired of reapplying / renewing every 5/10 years
  • Problem to refiannce a mature loan due to declining value

Benefits

  • Loan amount up to 90% of the current market value
  • 25 year loan term = save money, time, paperwork, renewals

3) Equipment Purchase or Refinance

  • Need to expansion to larger or durable equipment

Benefits

  • Up to 100% financing
  • 10 year full amortization term vs 3-5 years with conventional finance-Bigger loan amount, smaller loan payment, easier to qualify

4) Business Buy-Out or Acquisition

  • Shareholders buyout other partners
  • Operations look for opportunites to acquire an existing business

Benefits

  • Not commonly offered by conventional lending programs
  • Strong experience and expertise in Buy Out or Business Acquisition
  • Longer Term: Smaller loan payment, Easier to qualify

5) Tenant Improvements or Construction

  • Business need to build a brand new facility
  • Business need to renovate or do improvements to existing property

Benefits

  • Up to 100% financing for tenant improvements
  • Up to 90% for brand new construction
  • Up to 25 year term: save money, time, paperwork and renewals

6) Existing Debt Refinance

  • Business have existing debt with high interest rate
  • Business needs to term out a line of credit

Benefits

  • Pay down loan or build up equity over time
  • 10 year term vs 3-5 years with conventional financing: save loan payment, easier to qualify, larger loan amount

7) Long Term Working Capital

  • 10 year term vs. 3-5 years with conventional financing

Benefits

  • smaller loan payment, easier to qualify, bigger loan amount

Types of Industries for SBA loan

          

Next Steps for SBA or complete an SBA inquiry form and we will contact you.