SBA 7(a) Loan Overview

What Does The SBA Look For In An Applicant?

  • Demonstrate ability to repay with cash flow
  • Be a person(s) of good character
  • Management capability
  • Borrower’s equity contribution
  • Owners of 20% or more required to personally guarantee the SBA loan
  • Demonstrate a need for desired credit

How Can Funds From The SBA 7(a) loan Be Used?

  • Buy machinery and equipment
  • Business expansion
  • Purchase existing business, including buyouts
  • Augment working capital
  • Refinance debt
  • Start a franchise or new business
  • Make leasehold improvements/build out including remodeling or renovation
  • Refinance any outstanding venture capital debt to less expensive SBA debt
  • Inventory
  • Purchase owner-occupied commercial real estate

Who Is Eligible For A 7(a) Loan?

  • Operate a for-profit business
  • Engaged in or proposed to do business in the US
  • Possess reasonable owner equity to invest
  • Exhibit management capability and reasonable experience in the industry
  • Demonstrate a need for the loan

Are There Eligibility Guidelines?

Lenders apply the same criteria that they would with a traditional loan, but thanks to the SBA guaranty, some standards may be relaxed. The lender will judge a business based on several factors:

  • Equity investment: The more "skin-in-the-game" an owner has, the better.
  • Cash Flow: Does the business plan show enough cash flow to meet the debt obligation?
  • Collateral: Do the borrowers own anything of monetary value that can be used as collateral in the event of default?
  • Management: Do the borrowers have sufficient experience or background?

What Are The Interest Rates And Term Of Loan?

  • 2.75% above Prime adjusted quarterly
  • Amortization is 25 years maximum on fixed assets. Ten years maximum on working capital, or a blend for a mixed use of funds.
  • Processing fees — 2% guarantee on loans under $150,000, and up to 3.75% on higher amounts.
  • Other expenses include usual and customary legal and closing costs.

What Are The Loan Amounts?

  • As little as $50,000, and as much as $5 million.

Are There Any Geographic Limitations?

  • There are no location limitations. The SBA 7(a) loan can be originated in St. Louis for businesses located anywhere in the United States.

Get Started Today

Please fill out the information below