Business Financing

SBA Loans (7a & 504)

Government-backed financing programs offering the lowest rates and longest terms available. Ideal for acquisitions, real estate, equipment, and working capital when you can afford more documentation and processing time.

What Are SBA Loans?

SBA loans are partially guaranteed by the U.S. Small Business Administration, which allows lenders to offer more favorable terms than conventional loans. The SBA doesn't lend money directly—approved lenders provide the capital, and the SBA backs a portion of the loan, reducing risk for the lender.

This structure results in lower interest rates, longer repayment terms, and lower down payment requirements compared to traditional bank loans.

SBA 7(a) vs. SBA 504

SBA 7(a) Loan

Max Amount: Up to $5 million
Uses: Working capital, equipment, inventory, acquisitions, refinancing, real estate
Terms: Up to 10 years (working capital), 25 years (real estate)
Down Payment: Typically 10-20%
Rates: Prime + 2-3% margin (variable or fixed)

SBA 504 Loan

Max Amount: Up to $5.5 million
Uses: Fixed assets (real estate, equipment, renovations)
Terms: 10, 20, or 25 years (based on asset life)
Down Payment: As low as 10%
Structure: 50% lender, 40% CDC/SBA, 10% borrower

Best Use Cases

  • Business acquisitions: Buy an existing business with favorable terms
  • Owner-occupied real estate: Purchase or refinance commercial property
  • Equipment purchases: Buy machinery, vehicles, or technology
  • Major renovations: Upgrade facilities or build out new space
  • Refinancing debt: Lower payments on existing high-cost loans
  • Long-term working capital: Fund growth when you need extended terms

Qualification Requirements

Eligibility Criteria

  • Operate as a for-profit business in the U.S.
  • Meet SBA size standards (typically under 500 employees for most industries)
  • At least 2 years in business (some exceptions for startups)
  • Personal credit score of 680+ preferred
  • Demonstrated ability to repay (positive cash flow)
  • Owner must invest equity (typically 10-20% down)
  • Owner must occupy at least 51% of real estate (for CRE purchases)

Documentation Needed

  • SBA loan application forms
  • Business and personal tax returns (3 years)
  • Financial statements (P&L, balance sheet, cash flow)
  • Business plan and use of funds narrative
  • Personal financial statement
  • Business licenses and formation documents
  • Lease or purchase agreement (if applicable)
  • Resumes of key management

Advantages vs. Disadvantages

Advantages

  • ✓Lowest interest rates available
  • ✓Longest repayment terms (up to 25 years)
  • ✓Lower down payment requirements
  • ✓Larger loan amounts than alternative lenders
  • ✓Can be used for acquisitions and real estate
  • ✓Builds strong business credit

Disadvantages

  • ×Longer approval process (4-12 weeks typical)
  • ×Extensive documentation required
  • ×Personal guarantee required
  • ×Collateral typically required
  • ×Stricter eligibility requirements
  • ×Not suitable for emergency funding

Timeline & Process

1

Pre-qualification (1-2 days)

Initial review of credit and business overview

2

Documentation & Application (1-2 weeks)

Gather and submit full documentation package

3

Underwriting & Approval (2-6 weeks)

Lender and SBA review and approval process

4

Closing & Funding (1-2 weeks)

Final documents, closing, and disbursement

Total timeline: 4-12 weeks depending on complexity and responsiveness. Our team helps expedite wherever possible.

Ready to Apply?

Get pre-qualified in minutes. No hard credit pull to see your options.

Start Application

Questions? Talk to a specialist:

(215) 999-8412

Mon-Fri 9am-6pm CT

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