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SBA Loan FAQs
Please click on a question from the list below to view the corresponding answer.
How does the program work?
- The U.S. Small Business Administration guarantees a percentage of the loan, rather than actually providing the money. With the U.S. Small Business Administration’s guarantee, lenders grant loans they may not otherwise consider.
- Our affiliate provides you with the capital and, as your lender, our affiliate processes and services your loan, answer your questions and maintain a relationship with you over the term of the loan.
What can the loan money be used for, and for how long?
- Whether you already own a business or you’re starting, expanding or purchasing one, you can use the funds:
- To provide working capital—term up to 10 years.
- To purchase equipment or inventory, refinance or acquire a business, or for leasehold improvements—term up to 10 years.
- To purchase real estate—term up to 25 years.
How much can a business borrow?
- Under the SBA 7(a) program, you can borrow from $50,000 to $10 million.
Under the SBA 504 program, you can borrow from $500,000 to $10 million.
What fees are involved?
- The U.S. Small Business Administration charges a one-time guarantee fee that ranges from 2 to 3.75 percent of the guaranteed loan amount. These fees can be incorporated into your loan proceeds.
Is financing available to startups?
- Yes. The U.S. Small Business Administration’s less stringent requirements for owners’ equity and collateral and the longer terms at better interest rates make the SBA 7(a) program an excellent option.
Can SBA 7(a) proceeds be used for salaries, expenses & working capital?
- Yes. Proceeds can be used to fund these items.
How long will it take to get my loan approved?
- Once you have submitted a complete loan package, an approval can usually be obtained in a pre-determined time period.
How long for disbursement?
- Depending on the complexity of the loan, the time frame from application submission to disbursement of funds takes approximately 30-60 days.
How does a business plan factor into the application process?
- Business plans are critical for startup businesses. The U.S. Small Business Administration program requires a business plan as part of the application process, and we can assist you in writing one.
How do you view below-standard credit ratings?
- Although we do look for strong personal credit ratings from all owners and guarantors of the loan, we will work with those who have below-standard credit ratings to see if there are logical and sufficient reasons to explain the present ratings.
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