SBA Loans
An SBA Loan is a government backed loan that can be used to start or expand a business. The loan has certain requirements for eligibility, such as size standards, proving the ability to repay the loan and solid business purpose. The Small Business Administration works with specific lenders to offer their programs which eliminate the risk from the lender since they are backed by the government.
SBA loans provide long-term, fixed rate financing for small businesses. SBA loans have lower down payments and more flexible criteria than conventional bank loans.
Loan amounts up to $5 million are available for real estate, equipment, working capital, and other business purposes. Terms range from 10-25 years for real estate and equipment. SBA loans encourage lending to women, minorities, and veterans.
By reducing lender risk, SBA loan programs increase small business access to affordable capital. This spurs business expansion, job creation, and economic development, fulfilling the SBA mission.
ROK Financial has access to a wide variety of SBA loans. To explore your options complete our 15-Second Online Application Here.
Tips for Utilizing an SBA Loan
SBA loans can fund expansions such as purchasing, constructing, or renovating commercial real estate as well as acquiring land, buildings, and major equipment. Certain working capital needs and refinancing may also qualify.
Research the various SBA loan programs to understand the best type of financing for your specific business situation and needs. Compare SBA loan criteria, rates, terms, fees, and guaranty percentages.
Work with approved, experienced SBA lenders who understand the process and requirements. Be prepared to provide historical finances, projections, purpose of funds, collateral assets, and other documentation.
Benefits of SBA Loans
The key benefits of SBA loans include lower down payments, fixed interest rates, and longer terms versus conventional small business loans. Required collateral coverage ratios are also lower.
The SBA guaranty reduces the lender’s risk, enabling approval based more on business fundamentals than just personal credit scores or existing capital assets. This expands access to affordable financing.
SBA loans establish a long-term financing structure allowing businesses to plan for the future versus short-term options like credit cards or merchant cash advances.
SBA Loan Requirements
- 675 minimum FICO
- For-profit business
- No previous delinquencies on government loans
- Must be in business for at least 3 years
- Must be considered a "Small Business" by the SBA
If you are unsure if your business will qualify for an SBA loan, it’s best to reach out to a trusted lending partner to discuss your options and potential eligibility.
SBA 7(a) may be available if your business does not meet the minimum time in business or credit score requirements. ROK Financial has access to a wide variety of SBA loans.
To explore your options complete our 15-Second Online Application
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What is an SBA 7(a) loan?
A SBA 7(a) loan is the primary product from the SBA. It is not a loan directly from the SBA, rather, the SBA helps small business owners secure loans by guaranteeing a portion of the amount borrowed, capping interest rates, and limiting fees. Generally qualified business owners can use a 7(a) for any business purpose.
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What is an SBA 504 loan?
SBA 504 loans are generally used for buying fixed assets like equipment or real estate, which ultimately acts as collateral for the loan itself. This program may require a down payment and are made available through Certified Development Companies (CDC’s) not lenders.
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