SBA Loans - Financing Center

What is an SBA Loan?

An SBA loan is a commercial loan offered through a bank or authorized lender. SBA Loans are a tried-and-true method of franchise financing, created to help entrepreneurs by offering low interest rates and no balloon payments, with a guarantee by the SBAA common misconception is that the Small Business Association makes direct loans to entrepreneurs to kickstart their business(es). This is not the case. Instead, the SBA makes a guarantee to banks and lenders for the money they lend to small businesses. 

SBA loans also alleviate risk associated with lending money to business owners and entrepreneurs, who may not qualify for traditional loans. The benefits of SBA loans for borrowers are many and include:

  • Low-interest rates
  • Low repayment terms
  • The ability to be combined with other financing 

To qualify for an SBA loan you must have:

  • A credit score of 640 or above
  • Access to collateral 
  • A 30% equity injection, 20% for an existing franchise 
  • Solid income
  • Three years of applicable work experience

Types of SBA Loans

The financing amounts range anywhere from $25k to $5 million, and there are several options, including the following:

  • The 7(a) Loan Program: Can be used for a wide range of purposes such as working capital, revolving funds, equipment purchasing, and more. 
  • Export Assistance Loans: Includes Export Express, which can be used for any purpose that increases a company’s ability to export, such as: marketing, travel, short-term lines of credit, and capital expenditures. 
  • SBA Express Program: A part of the 7(a) loan program, and for businesses with financing needs up to $350k. This program can be used for a variety of business activities, and no collateral is required for loans up to $25k. 
  • SBA Microloans: These are loans that are given in smaller increments, providing up to $50K in small business funding. You do not receive these loans directly from the SBA, but rather, from a local lender, which is typically a nonprofit organization. Uses for this loan include working capital, inventory, and equipment, however, you cannot use a microloan to pay existing debts or purchase real estate. Also, collateral may be required. 
  • SBA CAPLines: Designed to meet the short term working capital needs of a business. This type of financing is best for small businesses that sell their goods and/or services on credit. The loan amount is based on need, and the maximum amount given is $5M. For eligibility, applicants must qualify under the standard 7(a) requirements and must be able to produce collateral. 
  • SBA 504 Program:Offers small businesses long-term, fixed-rate financing to acquire fixed assets for expansion or modernization. They are made available through Certified Development Companies (CDCs), which are the SBA’s community-based partners. The maximum loan amount provided is $5M, and the best part is; these loans have longer repayment periods than most. 

Competitive Terms 

Compared to personal loans, many SBA loans are a breeze. The turnaround time for a personal loan is within the same range as the SBA loans listed above. However, unlike most SBA loans, collateral is usually required for personal loans. 

Approval Time 

The average time to be approved for an SBA loan is anywhere from 45 to 90 days. However, in some cases, it can exceed that. 

Required Documentation 

Before applying for an SBA loan, make sure you have the following documents available and ready to present:

  • SBA Form 413, Personal Finance Statement
  • SBA Form 1919, Borrower Information
  • SBA Form 912, Statement of Personal History
  • Three years of federal personal tax returns
  • Management Resume
  • Personal ID
  • Business plan
  • Financial projections 
  • Information on affiliated businesses

For an existing business, you will need to also provide the following in addition to the above:

  • Three years of federal business tax returns
  • Profit and loss balance sheet 
  • Letter of intent or purchase agreement 

Get Free Financing Information Today!

Looking for expert advice on applying for an SBA Loan? Guidant Financial’s team of experts can connect you to approved lenders in their network who are the most likely to fund your loan. Call 888-472-4455 today or complete the brief form to schedule a free consultation with a Guidant Financial expert.

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These financing programs require that you have a minimum of $50,000 to invest in a business. Please indicate your source of your capital:

These financing programs require that the total project cost of your business venture will be at least $50,000.

These financing programs are for candidates seeking capital within the next 6 months. If your timeframe is further out than 6 months, please wait to request information.

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