SBA loans are small business loans partially guaranteed by the U.S. Small Business Administration and issued by its partnering lenders, community development organizations, and micro-lending institutions. 

SBA loans generally have tight lending standards, but with flexible terms and low rates, they can be one of the best options for financing a business.

Here’s what you need to know about getting an SBA loan for your business.

What is a 7(a) SBA Loan?

The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can be used for virtually anything, including:

  • Short- and long-term working capital
  • Refinancing current business debt
  • Acquiring a business
  • Buying out a partner
  • Purchasing real estate
  • Purchasing equipment, furniture, fixtures, and supplies

The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates.

For more information about 7(a) SBA loans, contact our Commercial Lending Team.

What are the benefits of an SBA Loan?

Loans guaranteed by the SBA allow lenders to provide loans to cash flowing borrowers who may not be able to fully secure traditional financing. In addition, SBA loans can offer:

  • Longer repayment terms and lower monthly payments
  • Lower down payments to help with upfront costs
  • Competitive fixed or variable interest rates

To learn more about the benefits of an SBA loan, contact our Commercial Lending Team.

Do I qualify for an SBA Loan?

To be eligible 7(a) loan assistance, businesses must:

  • Operate for profit
  • Be considered a small business, as defined by the SBA
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Have reasonable invested equity
  • Use alternative financial resources, including personal assets, before seeking financial assistance
  • Be able to demonstrate a need for a loan
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligations to the U.S. government

How do I apply for an SBA Loan?

Once you have decided to apply for a loan guaranteed by the SBA, you need to collect the appropriate documents for your application. One of our dedicated SBA Loan Officers at Kendall Bank can help guide you through that process and answer any questions you have along the way.  

To see if an SBA Loan is right for your business, contact our Commercial Lending Team.