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SBA 7a Loans
SBA 7a loans are the most basic and most used type loan of SBA's
business loan programs. Its name comes from section 7(a) of the Small
Business Act, which authorizes the Agency to provide business loans to
American small businesses through private lenders.
Loan Amounts
Borrower Benefits
- Long repayment terms, reducing monthly payments.
- Frees up cash flow to expand your business.
- Low down payment of as little as 10% on multi-purpose real
estate acquisitions and as little as 15% on single-purpose real
estate acquisitions.
- Financing available for most industry types including:
hotel/motel, gas station/convenience stores, restaurants and day
care.
Use of Proceeds
- Real estate - purchase, construction, renovation or
refinance of commercial real estate. Majority of space must be
owner-occupied. Loans up to $2.0 million.
- Business acquisition - business, franchise or
professional practice. Loans up to $2.0 million.
- Machinery & equipment - purchase or refinance. Loans up to $1.5
million.
- Start-up - franchised businesses such as restaurants and
hotel/motel. Loans up to $2.0 million.
- Real estate - up to 90% financing, up to 25 years,
Prepayment penalty for initial 3 years, none after the end of year
3.
- Business acquisition - up to 75% financing (or 80% with
seller financing component), up to 10 years, No prepayment penalty.
- Refinance - up to 100% financing, up to 25 years,
Prepayment applicable for initial 3 years on terms greater than 15
years.
- All 7a loans are fully amortized and are assumable.
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SBA 504 Loans
The 504 loan program is a long-term financing tool for economic
development within a community. The 504 Program provides growing
businesses with long-term, fixed-rate financing for major fixed
assets, such as land and buildings.
Borrower Benefits
- Low down payment of only 10%.
- Long repayment terms - reducing monthly payments.
- Frees up cash flow to expand your business.
- Many rate options including long term fixed rates.
Use of Proceeds
- Purchase, construction or renovation of owner-occupied
commercial real estate.
- Refinancing of existing debt is not permitted with a 504. Please
refer to SBA 7a for refinance transactions.
Loan Amounts
Terms - First Mortgage
- 25 years, fully amortized.
- Fixed, floating and adjustable rates available.
- Competitive fee structure.
- Prepayment penalty applies and is set based on various factors.
Terms - Second Mortgage
- 20 years, fully amortized.
- Fixed rate is determined at SBA-guaranteed 504 debenture sale.
- Fees set by CDC.
- Prepayment penalty for initial 10 years, none after the end of
year 10.
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Conventional
Conventional lenders can provide up to 80% financing for childcare
businesses.
Loan Amounts
Borrower Benefits
- Wide variety of lenders allows you to shop for a favorable
rate.
- Provides capital to start or expand your business.
- Low down payment of as little as 20%
Use of Proceeds
- Real estate - purchase, construction, renovation or
refinance of commercial real estate.
- Business acquisition - business, franchise or
professional practice.
- Machinery & equipment - purchase or refinance.
- Start-up - New construction of center facility,
franchised businesses.
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