SBA GUARANTEED LOAN PROGRAM -- 7a

Sources:

  • Banks, Credit Unions, and non-Bank Lenders

Eligibility:

  • For-profit businesses (usually privately owned),
  • Located in the United States,
  • Businesses not engaged in illegal or prurient operations

Amount:

  • 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. 

Maximum Term:

  • 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.

Interest Rate:

  • 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. 

Collateral:

  • 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.

Fees:

  • 2% of the guaranteed loan amount.

Other:

  • 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.