Business and Commercial Mortgage Loans

sba loans

SBA 7(a)

SBA 504

SBA Express Loan

SBA Overview

The SBA offers numerous loan programs to assist small businesses. It is important to note, however, that the SBA is primarily a guarantor of loans made by private and other institutions.

Basic 7(a) Loan Guaranty

FUNCTION: Serves as the SBA’s primary business loan program to help qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. It is also the agency’s most flexible business loan program, since financing under this program can be guaranteed for a variety of general business purposes.

Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets/real estate.

CUSTOMER: Start-up and existing small businesses, commercial lending institutions

DELIVERED THROUGH: Commercial lending institutions/banks

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SBA 504 Loan Guaranty

FUNCTION: Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector lender (bank) with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower.

CUSTOMER: Small businesses requiring “brick and mortar” financing (hotels)

DELIVERED THROUGH: Certified development companies (private, nonprofitcorporations set up to contribute to the economic development of their communities or regions)

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