Small Business Administration (SBA) Loans

• Available for start-up businesses, as well as purchasing and refinancing existing businesses
• Government-assisted help for businesses that might otherwise have difficulty getting approved
• Special financing for qualifying businesses
• Competitive rates for a wide range of business needs:
  • Commercial real estate purchase
  • Construction
  • Business acquisition or expansion
  • Equipment/inventory purchase
  • Working capital
  • And more
• A wide range of lending options available
• Generally lower down payments and extended terms
• Additional considerations taken when deciding maturity*
• Flexible repayment terms tailored to the needs of your business
• Local decisions made here in Nebraska
• Friendly and responsive service focused on you, from start to finish

SBA 7(a) loans are the most common type of SBA loan. These loans go up to $5,000,000 and can be used for working capital, to refinance debt, or to buy a business, real estate, or equipment. Two popular loans, the SBA Express Loan and the SBA Advantage Loan, are part of the 7(a) loan program.

SBA 7(a) loans are right for most businesses looking to finance their working capital needs. These loans are what most people are referring to when they ask about SBA loans and can be used for pretty much any business purpose. SBA loans are popular because of their long repayment terms and low interest rates, which make 7(a) loans one of the most affordable working capital solutions.

SBA 7(a) Loans

SBA 7(a) Loan Requirements

SBA 7(a) loans are available to both startups and more established small businesses. To qualify for an SBA 7(a) loan, you will generally need to meet these minimum requirements:

• Credit Score:  680+
• Other Requirements: No recent bankruptcies, foreclosures, or tax liens
• Collateral: While the SBA will not refuse to guarantee a loan due to insufficient collateral, loans under $25K don’t need to be collateralized
• Down Payment: 10%+ down payment if you are using the loan to purchase a business, commercial real estate, or equipment

The standard SBA 7(a) loan is that the application process can take months. The SBA Express program addresses this problem, the SBA offers an expedited processing service called the SBA Express Loan Program

The SBA Express Loan generally follows the same guidelines as the standard SBA 7(a) loan, but the maximum loan amount is $350,000.  The SBA guarantees a maximum of 50% for SBA Express loans which means the interest rates on an SBA Express loan can be a bit higher than other 7a loans.

The CDC/SBA 504 loan program is for small businesses looking to buy or build owner-occupied commercial real estate. The program pairs two lenders together to fund these projects, a bank or traditional lender and a community development corporation (CDC). The bank lends up to 50% and the CDC lends up to 40%, while the remaining 10% of the project’s costs come from the borrower, typically in the form of a cash down payment.

CDC/SBA 504 loans require that the business occupy at least 51% of the commercial space. So, while this is a great opportunity to rent out 49% of your new building to tenants, it’s only right for companies that actually expect to use the space as one of their key locations.

CDC/SBA 504 Loans

CDC/SBA 504 Loan Interest Rates & Terms

The two loans involved in the 504 loan process will have different rates, terms, fees, and limits. Combined, these rates will make up your total SBA/CDC 504 loan rates.  Generally you’ll pay a total of 4-6% interest on your entire loan with repayment terms as long as 25 years.

The combined maximum loan size for a project is $14 million. However, while there is a limit on how much can be loaned per project, borrowers can take out multiple SBA 504 loans at the same time for different projects. This raises the maximum amount to $20 million.

CDC/SBA 504 Loan Requirements

To qualify for a CDC/SBA 504 loan, your business must meet these minimum requirements:

• Credit Score: 660+
• Down Payment: 10%+ of the project cost

Additionally, you’ll be required to not have the needed funds available from other sources, not be engaged in the investment of rental real estate and you’ll need to meet these other requirements:

• Have a tangible net worth less than $15 million
• Be able to repay the loan on time from the projected operating cash flow of the business
• Building must be 51%+ owner occupied