A Simple Path to SBA Financing

An SBA loan is business financing provided by a participating lender and partially guaranteed by the U.S. Small Business Administration. The government guarantee reduces some of the lender’s risk, helping qualified small businesses access financing for eligible business purposes. The SBA generally does not lend money directly to business owners.

Depending on the program, SBA financing may be used to:

• Purchase an existing business
• Buy into an eligible franchise
• Purchase or improve commercial real estate
• Acquire machinery, vehicles or equipment
• Provide working capital
• Purchase inventory, furniture, fixtures or supplies
• Expand an existing business
• Refinance eligible business debt
• Complete a full or partial change of ownership

Not every use is permitted under every SBA program. The participating lender will determine whether your proposed use qualifies.

SBA 7(a) loans are available for up to $5 million. The maximum amount for an SBA 504 loan is generally $5.5 million. The amount an individual business can borrow depends on its financing needs, creditworthiness, cash flow, collateral, ability to repay and lender underwriting requirements.

The SBA 7(a) program offers flexible financing for business acquisitions, working capital, equipment, real estate, eligible debt refinancing and other approved business purposes.

The SBA 504 program is primarily designed to provide long-term, fixed-rate financing for major fixed assets, such as owner-occupied commercial real estate and qualifying long-term equipment. SBA 504 loans generally cannot be used for working capital or inventory.

General eligibility requirements vary by program, but a business will typically need to:

• Operate for profit
• Conduct business in the United States
• Meet the SBA’s applicable size standards
• Operate in an eligible industry
• Demonstrate creditworthiness
• Show a reasonable ability to repay the loan
• Provide the documentation required by the lender

Participating lenders may have additional underwriting requirements.

The SBA does not establish one universal minimum personal credit score for every loan. Credit requirements vary by lender, loan program, requested amount and the applicant’s overall financial profile.

Lenders may consider personal and business credit, revenue, cash flow, debt obligations, collateral, industry experience and the intended use of funds.

A down payment or equity contribution may be required for certain transactions, particularly business acquisitions, startups and commercial real estate purchases.

The amount varies based on the financing program, lender, transaction structure and applicant’s qualifications. Your lender will explain the contribution required for your specific request.

Collateral requirements depend on the loan program, requested amount, available business assets and lender policies. A lack of sufficient collateral does not automatically mean a business will be declined, but applicants may be required to pledge available business or personal assets.

Personal guarantees are commonly required from individuals who own a significant interest in the business.

Processing time depends on the lender, loan program, requested amount and complexity of the transaction. A business acquisition or commercial real estate loan may require additional documentation, valuations, appraisals and due diligence.

Providing complete and accurate information promptly can help prevent unnecessary delays, but no specific approval or funding timeline can be guaranteed.

A lender may request:

• Business and personal tax returns
• Business financial statements
• Bank statements
• Personal financial statements
• Business debt schedules
• Ownership information
• Business licenses and organizational documents
• Business plans or financial projections
• Purchase agreements
• Equipment quotes
• Commercial real estate information
• Additional documents related to the financing request

The exact requirements vary by lender and transaction.

Yes. SBA 7(a) financing may be used for a complete or partial change of ownership, including purchasing an established business or completing an eligible partner buyout.

The lender will generally evaluate the buyer’s qualifications, the financial performance of the business, the purchase price, the transaction structure and the business’s ability to support the proposed debt.

Some startups may qualify, but financing a new business can be more challenging because there is little or no operating history. Applicants may need strong credit, relevant management experience, a detailed business plan, financial projections and an appropriate equity contribution.

Eligibility and requirements vary by lender and financing program.

No. Submitting an application does not guarantee approval, a financing offer or funding. All requests are subject to program eligibility, lender underwriting, credit review, verification and satisfactory completion of required documentation.

No. SBALoansFor.com is not a bank, direct lender, government agency or the U.S. Small Business Administration. We help business owners explore SBA financing and connect with independent participating lenders and financing providers.

Available products, amounts, rates, fees, terms and approval requirements vary by provider and applicant.

Complete the secure online application and tell us about your business, requested financing amount and intended use of funds. Your information can then be reviewed to identify potential SBA financing options and participating lenders that may fit your request.