SBA Loan Programs

SBA Microloan Program


The typical Microloan borrower profile is a micro-enterprise that may be a startup. This borrower may have had credit problems in the past and is likely not a candidate for a bank loan.


  • Lender: Non-profit lenders approved by SBA

  • Maximum Loan Amount: $50,000

  • Interest Rate: Fixed average 8%

  • Maximum Loan Term: 6 years

  • Fees: Up to 2% of loan amount

  • Collateral: varies from lender, personal guarantee is likely

  • Typically used for: working capital, supplies, equipment, furniture & fixtures


SBA 7(a) Guaranty Loan Program


The typical 7(a) borrower profile is an existing business, although startups are eligible. For each owner, 20% or more of the business, personal credit must be satisfactory (no recent bankruptcies). Personal credit score must meet lender's minimum requirement.


  • Lender: Banks and Credit Unions

  • Maximum Loan Amount: $5 Million

  • Interest Rate: Generally Prime +2.75%

  • Maximum Loan Term: 10 years (25 years for real estate)

  • Fees: 2% - 3.75% of guaranteed amount

  • Collateral: Personal Guaranty of 75% - 85% of loan amount

  • Typically used for: working capital, inventory, equipment, real estate, debt refinance, acquisition, franchise.


SBA 504 CDC Loan Program (Certified Development Companies)


The typical 504 borrower profile is a seasoned business that can demonstrate repayment ability from historical cash flow. Owners have sufficient personal assets to cover a minimum 10% down payment. These borrowers may be seeking to avoid uncertainty of lease renewals and rent increases, and benefit from commercial real estate ownership. The 504 is usually introduced after a mortgage lender is on board to finance the project property.


  • Lender: Non-profit CDC approved by SBA

  • Maximum Loan Amount: $1,123,588

  • Interest Rate: Fixed, about 5+%

  • Maximum Loan Term: 25 years, fully amortizing

  • Fees: 3% of loan amount

  • Collateral: 2nd lien on Project property


SBA Eligibility


  • Must be a for-profit business

  • Must qualify as a small business concern

  • Must be an eligible type of business

  • Must be at least 51% owned by US citizens or legal permanent residents.

  • Owners cannot be on probation or parole


SBA Ineligible businesses


  • Businesses primarily engaged in lending

  • Life insurance company

  • Real estate investors and landlords

  • Pyramid sale distribution plans

  • More than 1/3 gross revenue from grambling

  • Private clubs that limit membership

  • Speculative businesses


How to Apply for a Loan


The typical loan application will require the following


  • Prior year’s tax returns

  • Historical financial statements

  • 3-year pro-forma financial statement forecast

  • Working capital schedules like Accounts Receivables, Accounts Payable and Inventory.

  • CAPEX schedules

  • Business Plan

  • Personal Assets (for personal guarantees)


READ HOW TO APPLY FOR A LOAN


Before applying for any type of financing, it is important for businesses to have their books in good order. GFT's accounting services can help get your books ready for a loan application. Continued monthly accounting will help borrowers maintain a healthy relationship with their lenders. GFT corporate finance services can help guide your business with the loan application process.


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