Small Business Loans SBA 7(a) & 504
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Small Business Administration Loans
The Small Business Administration loan often referred to as an SBA loan is designed to provide financing for the start up or the expansion of a business. SBA was originally designed for the new businesses but has been expanded in recent years to give much needed assistance to small businesses that are growing.
SBA loans are not made by the Small Business Administration. These loans are actually made by independent lenders and banks. The SBA simply provides insurance or a guarantee to the banks that make the loan. A portion of the funds you borrower are insured in case of default.
Important to Remember
It is important to understand how SBA works. When applying for a loan you will actually be working with a lender and their internal requirements first and then the lender will apply for the SBA guarantee.
This is an important fact to know because not all SBA loans are equal. Two different lenders may have completely different interest rates, qualifying ratios and LTVs for the exact same project. So when searching for an SBA loan your mega-bank may not give you the most favorable terms.
Two Types of SBA Loans
There are two general types of SBA loans. The SBA 7(a) is for new businesses. SBA 7(a) loans can be used to start a franchise or for a ground up start-up. These loans are for the new entrepreneur or the experienced business person seeking to launch an innovative product or service.
The other type of SBA loan is the SBA 504. The SBA 504 program is designed for business expansion. It is generally reserved for businesses that are doing well and are looking for funds to grow or modernize a facility or business process.
Real Estate & the SBA
Whether you are applying for an SBA loan or any other type of business financing there is one key factor that can increase your probability of success … real estate in the transaction. If you pledge real estate as collateral or are purchasing real estate as part of the start up, your chances of success will be greatly enhanced.
In the current market environment lenders are seeking more security for their money. Adding a tangible asset like real estate to the transaction increases the security for the lender and lessens their risk. With SBA loans you must plan to occupy at least 51% of the space, the rest can be used as rental to increase net cash flows to the business.
To find out more about how an SBA loan can benefit your business give us a call (404) 819-4511 or email your questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it |
Closed Loans
| $1,950,000 Apartment Bridge Loan-closed in under 3 weeks! |
Where? Memphis, TN
Type: This was a bridge loan on the purchase of an apartment complex that did not have the necessary occupancy to get a normal loan and the client wanted to close quick. From the time the client signed our term sheet to the closing was a whopping 18 days! |
| $570,000 Purchase of Existing Commercial Property |
Where? North Richland Hills, TX Type: This was for the purchase of a restaurant and we used an SBA 504 loan which gave the borrower excellent rates. From the time the client signed our term sheet to closing was 45 days which is VERY quick for an SBA loan with Real |
| $2,640,000 Purchase of 4 Burger Kings-Business Only No Real Estate! |
Where? Louisville, KY
Type: This was done on an SBA 7A program. These were all leased properties. The size of the deal and the fact that no real estate was involved made it tough for most lenders but we got it closed! When you are thinking about acquiring a business, starting |
| $309,000 Start-Up Working Capital Loan! |
Where? Kinnelon, NJ Type: This was working capital for a business start up doing energy audits for the state of NJ. If you are a small business and you need cash, we have many ways to get you the cash you need from factoring to working capital loans and everything in between. |