What is the SBA?
The Small Business Administration (SBA) is a federal agency dedicated to strengthening America’s small businesses through initiatives such as the SBA loan program.
What is the SBA loan program?
Under the SBA loan program, the US Government guarantees a large percentage of the loan as added security for the bank. Because the risk to the lender is decreased, this encourages them to lend the small business money with terms more favorable to the borrower. These more favorable terms may be:
- Easier qualification
- Lower down payment
- Lower interest rate
- Longer terms (or maturity)
- And others
What can the SBA 7a loan program be used for?
- Business acquisition
- Business expansion
- New construction
- Purchase of land or buildings
- Purchase inventory, equipment, machinery, furniture, fixtures, supplies, and materials
- Working capital
- Partner buyout
- Debt refinancing
- Franchise financing
What is the maximum allowable loan amount?
YourSBA.com can help you secure financing up to $5,000,000.
What is the interest rate?
The maximum allowable interest rate by law is WSJ Prime + 2.75%. As of May 2021, this is 6% max.
What are the typical loan terms?
- Up to 10 years for equipment, refinance, leasehold improvements, or business acquisition
- Up to 25 years for real estate
- Your final loan term is calculated from an algorithm that depends on the breakdown of your loan proceeds. The easiest way to get an idea of your loan term is by using our loan scenario calculator found here: SBA Loan Calculator
How much down payment is required?
- 0% for a business expansion or working capital loan.
- 10% down payment for a business purchase. Again, please use our popular loan scenario tool found here: SBA Loan Calculator
What can I use as a down payment?
- Cash
- Home equity line of credit
- Outside investor or business partner
- Gift from family member or friend. We can send you a simple Gift Letter upon request.
- 401k or IRA. Please contact us for further information on this down payment source.
I found a business I wish to purchase. Now what? How do I get started?
Please start here for a 24-48 hour pre-approval: Let’s Get Started !!!
How long does the entire SBA loan process generally take? How long does it take to get an SBA loan?
After approval by our underwriting team, typically 45-90 days.
What credit score is required?
There are no set credit score requirements for the SBA loan program. Why? Credit “character” is most important.
What if I have already been turned down by a bank?
Do not worry. Many of our past clients had been declined by a bank before working with us to successfully secure their loans. Every bank is different. It is our job to know which bank wants your business.
What are the business requirements?
- Must be a legal US business
- Must have positive cash flow for the last two years
- If no cash flow, or no positive cash flow, loan will be considered a “projection” loan or “startup” loan and require a 30% total equity injection.
Do I need a business plan?
A business plan is a great tool for building a lender’s confidence in you as a borrower. Our team has expertise across all industries and will assist you in completing your business plan.
Smaller loans are easier to get, right?
This is a common misconception. As a general rule, the same amount of paperwork is required regardless of the size of the loan. Of course, a lender may look at a larger loan with more scrutiny than a smaller loan.
How can I estimate my loan scenario?
You can get an estimate of your SBA loan scenario – including loan term, interest rate, and monthly payment – using our calculator found here: SBA Loan Calculator
Alternatively, if you forget the link to our calculator, you can Google “SBA loan scenario” and find our calculator in the first search result.