SBA LOANS 504 & 7(a)
SBA LOANS: REAL ESTATE
SBA 7(a) loan proceeds can be used for financing many different business financial needs. There are restrictions on how the funds can be used. For example, applicants may not use funds as an asset for potential increased value or for reimbursement of funds used for the business previously.
A fixed rate SBA 7(a) Loan provides up to 90% financing, with low down payment requirements for the business owners looking to purchase a multi-use space.
Here are some of the eligibility requirements for businesses applying for an SBA Loan:
The business MUST be defined as “small” according to SBA guidelines
The business MUST operate for profit
The business MUST not be delinquent on any existing debt to U.S. government
The business MUST be located in, or doing business in, the United States
Applicants MUST have exhausted all financial resources, including personal assets before applying
The business MUST have sufficient equity
NOTE: When purchasing Owner Occupied space for a business, a Real Estate SBA Loan is the best business option for financing.
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The Small Business Association offers a variety of loans for business with varying terms and APR. Funds can be used for anything from the purchase of equipment, to construction and inventory. The SBA provides specific requirements to be considered a “small business” and eligibility is determined based on the ability to provide proof of those requirements. The immense benefit of this financing is that the SBA will guarantee a percentage of these loans to the lender. This provides a significant measure of security for guaranteed repayment. As a result, financial institutions have more incentive to lend money to these qualified small businesses.
SBA LOANS: EQUIPMENT
An SBA 504 Loan is a perfect option for small to mid-size business owners seeking funding for equipment and machinery. Equipment loans are commonly funded up to 80% - 100% of the equipment purchase price.
Qualifying purchases will have a long-term value and will be used solely for business purposes. Therefore, in order to be approved for an SBA 504 Equipment Loan, the business owner must provide proof of experience in their field of operation and show a need for the equipment being purchased. When a business is denied traditional funding, an SBA 504 loan provides funding with low APR and easy terms.
SBA FINANCING: INVENTORY LOANS
An SBA 7(a) Inventory Loan is commonly used for the purchase of inventory and/or stock in order to meet their business needs. In this type of financing, the business' future income is used as collateral and the loan is paid as inventory is sold.
Our SBA 7(a) loan program features low APR with easy terms. A mentioned earlier, the business owner will also be required to show proof of experience in their field of operation and records or sales/ income for prior years in order to qualify for a SBA 7(a) Inventory Loan.