The SBA 7(a) is the most common small business loan and is meant to provide federal assistance to businesses that meet special requirements. Rather than outlining what businesses are eligible, the SBA generally lists what businesses are not eligible.
SBA 7(a) Eligible applicants’ businesses must:
- Operate for profit
- Be small, as defined by Small Business Administration
- Operate in the United States
- Have reasonable invested equity
- Be able to demonstrate a need for the loan proceeds
- Use the funds for a sound business purpose
- Not be delinquent on any existing debts to the U.S. Government
Privately-owned medical facilities including hospitals, clinics, medical and dental laboratories, emergency outpatient facilities, and recovery and nursing homes are also eligible, provided they are licensed by the appropriate government agency and provide more than room and board.
SBA 7(a) Ineligible Businesses
- Financial businesses
- Life insurance companies
- Businesses deriving more than one-third of its revenue from legal gambling activities
- Private clubs and businesses that limit membership for reasons other than capacity
- Businesses principally engaged in teaching religion or in political or lobbying activities
- Consumer and marketing cooperatives (producer cooperatives are eligible)
Basic uses for SBA 7(a) loan:
- Starting or expanding a business, or merging with an established business
- Purchasing real estate (land and buildings)
- Constructing or renovating a building
- Providing long- and short-term working capital to finance other expenses
SBA 7(a) Rates and Fees
We offer competitive rates and fees to meet a variety of small business needs.
Loan Amount: $5mm
Term: 25 years
Min. Credit Score680
Lending Territory: Nationwide
Property Types: Hotels, Restaurants, Office, Mixed Use, Retail, Gas Station/C-Store, Day Care, Medical Office, Assisted Living, Warehouse/Manufacturing, Self Storage, Industrial, Land
Collateral: Commercial RE
Prepayment Penalty: Declining 5%, 3%,1%
Guarantees: Personal recourse required. All owners with 20% or more interest in the business.
Rates and Fees: Inquire for rates
SBA 7(a) Loan Structure
SBA 7(a) loans are fully funded by lenders (SBA-licensed banks and other lending institutions), but the SBA provides a guarantee to lenders on a 75% portion of the loans. A minimum 10-25% equity contribution is required from the borrower on multi-use, special-use or single-use properties financed by the loan.
For more information and to start the loan process call me today.
Chris Adams / Vice
President Commercial Lending Northeast
Office (860) 788-7237