SBA GUARANTEED LOAN PROGRAM -- 7a
- Banks, Credit Unions, and non-Bank Lenders
- For-profit businesses (usually privately owned),
- Located in the United States,
- Businesses not engaged in illegal or prurient operations
- Maximum loan amount in $5,000,000. Loans up to $150,000 are 85% guaranteed, loans more than $150,000 are 75% guaranteed. (For example, $750,000 of a $1,000,000 loan is guaranteed)
Use of loan proceeds:
- Funding for existing businesses, business acquisitions, and start-ups, including franchises.
- Up to 25 years for Real Estate
- Up to 10 years for Fixed Assets
- Up to 7 years for Working Capital
Note: Multiple uses of funds usually result in a "blended" loan repayment term.
- For loan repayment terms <7 years, Wall Street Journal Prime plus 2.25%.
- For loan repayment terms > 7 years, WSJ Prime plus up to 2.75%.
- Fixed interest rate pricing can be available at lender's discretion.
- A first lien position on all business assets.
- Personal assets may also be required, and a Personal Guarantee will be required from all 20% or more business owners.
- 2% of the guaranteed loan amount.
- For start-ups, a Business Plan, with projected financial results, will be required.
- Borrowers should work with Preferred SBA lenders, as they have the most experience reviewing and approving SBA loans and can make their own credit decisions.