Is an SBA 7(a) loan right for you?
SBA 7(a) loans are some of the most flexible commercial finance products available and account for the largest number of SBA loans. They are an appealing loan option for most small business owners as they can be used for a wide variety of purposes, all of which can be bundled within the loan to simplify the process and lower the overall monthly payment.
The SBA 7(a) Loan can provide full solutions to your business financing needs.
How can it be used?
Proceeds can be used for a wide variety of business purposes, including the purchase of owner-occupied real estate, leasehold improvements, equipment, working capital, business acquisition, partner buyouts, and business startup expenses. It can also be used to refinance existing business debt that was used for any of these purposes. In many cases, different uses of proceeds can be accomplished all in one loan, which simplifies the loan process for the borrower and usually results in lower monthly payments than other financing products on the market.
What are the terms?
Typical loan terms range from 10 – 25 years and are fully amortizing, so there are no balloon payments. Depending on the use of proceeds, financing may range from 70% to 100% of the total project cost. SBA 7(a) Loans have a maximum amount of $5 Million, and our lenders will go as low as $100,000. Both variable and fixed rate options are available to existing businesses. Collateral is typically not required on standard 7(a) loans less than $500,000 or SBA Express loans. For SBA 7(a) loans over $500,000, all available collateral will used.
How long is the process?
On average, SBA 7(a) loans take 60-90 days to close. This varies depending on the scope of your project and the involvement of any third parties, such as general contractors, landlords, attorneys, and appraisers. Construction projects tend to take longer due to permitting, architectural drawing etc. while acquisitions and start-up requests can be on the quicker side.
What documents are needed?
The exact documents needed will vary based upon the nature of your project, but you can expect to be asked for;
– Business Plan & Resume
– Last three years of business & personal tax returns
– Interim Financial Statements
– Personal Financial Statements