SBA loans are varied with specific qualifications for each, but all are designed to promote growth and business success.
SBA 7(a) Loans can be used for nearly any business purpose, such as commercial owner-occupied real estate, construction or renovation for owner-users, business acquisition and start-up, refinancing for existing debt, equipment purchases, working capital and inventory.
- Competitive rates and down payments as low as 10%
- Quick approval and fast closings on loan amounts to $2 million
- Low monthly payments with up to 25-year amortizations available
As a non-profit set up to contribute to its community's economic development, a Certified Development Company (CDC) works with the SBA and private sector lenders to provide financing to small businesses. The 504 CDC Program provides growing businesses with long-term, fixed-rate financing for major fixed assets such as land and buildings.
SBA504 loans are typically secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped.
- Must be used for fixed asset projects such as purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities.
- Can also be used for modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.
- Cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.