SBA Loans

A Small Business Administration-backed loan, or an SBA business loan, can help your business to get working capital to accomplish any goal, like expanding, purchasing/refurbishing equipment, taking on new real estate, or refinancing an existing mortgage or agreement, and more.

SBA loans are one of the most desirable and sought-after types of business loans. Many small business owners apply for SBA loans before exploring other similar options. Between lower interest rates and substantially longer repayment terms, SBA loans tend to give you the funding you need without disrupting your cash flow.

While you can get SBA financing through both financial institutions like traditional banks and online lenders, they aren’t taking all of the risk. These loans are guaranteed through the SBA, a branch of the government dedicated to fostering stronger small businesses.

Through most lenders, SBA loans come with one drawback: it can take forever (up to 8 months) to complete the process. Banks thoroughly review loan applications, business plans, personal credit score, and more before providing an answer. When you use an SBA loan to drive revenue in your business, it can significantly improve cash flow.

National Business Capital has eliminated this issue by streamlining the process to 45 days! Through our network of  lending partners, we can speed up the funding process to complete it in nearly half the time while also simplifying the long and complex procedure to make SBA funding much easier for you. With guidance from your Business Financing Advisor, you can even get an SBA loan with a tax judgment.

If you’re looking to use an SBA loan for any purpose other than acquiring an existing business, here are the standard requirements:

• 2+ years in business
• $500,000+ in annual gross sales
• 685+ credit score

If you’re looking to use an SBA loan to purchase an existing business, the requirements are:

• 10% down payment
• 680+ credit score
• Industry/managerial experience
• No criminal history (or the ability to explain misdemeanors on your record)
• No current federal debt
• If purchasing a franchise, a paid franchise fee

Your business, or the business you’re looking to purchase, must also fall within the SBA’s overarching eligibility criteria. Outside of the traditional minimum credit score, time in business, and annual gross sales requirements, your business (or the one you’re looking to purchase) must:

• Operate for profit
• Do business within the U.S. (or propose to)
• Have “reasonable” owner equity to invest
• Have sought out alternative resources, like personal savings and assets, before seeking assistance through the SBA

It’s important to know if your business qualifies BEFORE sending an application. That way, you won’t wait months only to find out you were ten points off the minimum credit score requirement, and you can avoid wasting precious time you could have spent running your business.

SBA loans are some of the most coveted financing options available to entrepreneurs because of their high borrowing limits and low-interest rates. SBA-sponsored lenders offer their financing products based on strict eligibility requirements, including high credit scores, extended time in business, and substantial annual revenue. If your organization doesn’t meet these criteria, you might find it difficult to qualify for some of the more substantial SBA financing programs, but you might be able to reach approval with a more lenient option, like SBA microloans.

Longer Terms

Build your business the right way, with term lengths ranging from 10-25 years

Prime Rate+

Access the best SBA rates and terms available through one simple application.

Express Funding

Get streamlined funding on loan amounts of $350K or less.

Small Business Administration loans come in a variety of shapes and sizes, with each option offering a unique set of benefits to borrowers. Here are the three main types of loans offered by the SBA:

SBA 7(a) Loans

SBA 7(a) loans are the SBA’s most common loan program. It provides up to $5 million in funding for a variety of business purposes, including working capital, equipment purchases, construction/renovation, and other growth investments, with repayment terms of up to 25 years.

SBA 504 Loans

This type of SBA loan can only be used to promote business growth and job creation, which includes the purchase/construction/improvement of

• New facilities
• Pre-existing facilities
• Pre-existing buildings
• Long term equipment and machinery
• Land, streets, utilities, parking lots, and landscaping

SBA 504 loans can’t be used for working capital, inventory, refinancing debt, or speculation/investment in real estate rental properties.

SBA Microloans

The SBA’s microloan program offers up to $50,000 in capital to qualified borrowers. While you can’t use the funds to pay existing debts or purchase real estate, you can use a microloan for any other business purpose, including working capital, equipment, payroll expenses, and much more.

The SBA loan application process is similar to applying for other forms of financing, with a few caveats. Here’s what to expect:

Determine Your Eligibility

Anyone looking to apply for SBA loans should first confirm that they meet the minimum qualifications. If you don’t qualify, you should seek out other types of lenders, including banks, credit unions, and non-bank lenders.

Choose the SBA Loan That’s Right for You

Next, you’ll need to decide which type of SBA loan will work best for your business and find SBA lenders. Consider the funding amounts, repayment schedule, and the finer details of each option to help you reach a decision. Once you’ve determined the one that aligns with your business goals, you’ll start your search for an SBA lender.

Find an SBA Sponsored Lender

Banking institutions, including Wells Fargo and Chase Bank, and some non-bank lenders, offer SBA loans. Their availability varies by state, so make sure to do some proactive research to ensure you have viable options in your area. If you’re having trouble finding a lender or you’d rather skip this step, consider working with a marketplace, like National Business Capital, to simplify your search for lenders.

Submit Your Application

Finally, you’ll fill out your SBA loan application and send the required documents, including SBA-specific forms, three years of business/personal tax returns, business bank statements, licenses, certificates, and any other relevant documentation. Make sure to double-check that you have everything before sending!

Keep in mind – the SBA underwriting process takes anywhere from 30 days to 6 months, potentially longer if there are hiccups or there’s an error on your application, and you have to resubmit it.

There are no “best” SBA loans for every business. Each one will have different needs and unique circumstances, so it’s recommended to carefully consider the option you choose to ensure you’re able to take full advantage of your financing.

An SBA loan is an excellent way to finance your big business dreams. Whether you’re looking to start a business, expand one, or fund a special project, SBA loans offer the resources to do so, with generous terms that allow you to repay on an easy schedule. SBA loans also provide access to other resources, such as grants and tax incentives, so you can maximize the efficiency of your capital.

With SBA loans, you can make any idea a reality – from launching your dream startup to creating the perfect product or service.

Business Growth

Buy new equipment or inventory, hire new staff, or prepare for seasonal changes.

Business Expenses

Get extra working capital to manage payroll, bridge gaps in cash flow, or pay bills.

Business Opportunities

Expand or open a second location, take on more clients, or capitalize on bulk order discounts.

Small Business Administration loans can be used for “most” business purposes, including working capital, equipment, construction of buildings, purchasing land, and much more. You can’t use one for investment real estate (to sell or lease), refinance existing debt that would “expose the SBA to a loss,” pay delinquent taxes, or to relocate the borrower from a community where their departure would result in a significant increase in unemployment.

There are some usage distinctions between the loan types, too. According to the SBA, 504 loans can only be used for “major fixed assets that promote business growth and job creation,” meaning you won’t be able to leverage this type for working capital, inventory, or consolidating existing debt.

Remember – the “best” SBA loans are the ones that fit your business and where it’s headed. Make sure to carefully review the usage restrictions, terms, and interest rates before signing on the dotted line to ensure you can Grow to Greatness with as little friction as possible.

Better Terms. Faster Funding. Easier Process.

You have a lot of funding options. National Business Capital, a Specialty Finance Group, centralizes all of your options in one place, allowing you to apply once and receive multiple offers.

The SBA process is notoriously long, but our award-winning team can finalize the process in as little as 45 days. If that won’t work for your timeline, all you have to do is let us know. We can find alternative options that align with your goals and negotiate on your behalf to tailor your contract to your unique needs.

National Business Capital has the experience and creativity necessary to keep your business moving forward, regardless of the market conditions. We look forward to learning more about your business and joining your journey.