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SBA Loans

SBA Loan Types

7(a) Loans
SBA’s most common loan program, which includes financial help for businesses with special requirements.

What is a 7(a) loan?

The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for:

  • Short- and long-term working capital
  • Refinance current business debt
  • Purchase furniture, fixtures, and supplies
Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.

Am I eligible?

To be eligible 7(a) loan assistance, businesses must:

  • Operate for profit
  • Be considered a small business, as defined by the SBA
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Have reasonable invested equity
  • Use alternative financial resources, including personal assets, before seeking financial assistance
  • Be able to demonstrate a need for a loan
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligations to the U.S. government
Some businesses may not qualify for a 7(a) loan. Read more about what the SBA considers an ineligible business.

How do I use the 7(a) loan?

Basic uses for the 7(a) loan include:

  • Long- and short-term working capital
  • Revolving funds based on the value of existing inventory and receivables
  • The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
  • The purchase of real estate, including land and buildings
  • The construction of a new building or the renovation of an existing building
  • Establishing a new business or assisting in the acquisition, operation or expansion of an existing business
  • Refinancing existing business debt, under certain conditions
  • Maximum loan amount of $5 million
  • Maximum SBA guarantees 85% for loans up to $150,000 and 75% for loans greater than $150,000
  • Interest rate Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
  • Maximum loan amount $500,000
  • Maximum SBA guarantees 85% for loans up to $150,000 and 75% for loans greater than $150,000
  • Interest rate Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
  • Maximum loan amount $500,000
  • Maximum SBA guarantee 50%
  • Interest rate Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
CAPLines is an umbrella program that helps small businesses meet their short-term and cyclical working capital needs. It features four lines.

  • Seasonal CAPLine: Borrowers must use the loan proceeds solely to finance the seasonal increases of accounts receivable and inventory — or in some cases associated increased labor costs. It can be revolving or non-revolving.
  • Contract CAPLine: This line finances the direct labor and material costs associated with performing assignable contracts. It can be revolving or non-revolving.
  • Builders CAPLine: This line can finance direct labor and material costs for a small general contractor or builder constructing or renovating commercial or residential buildings. The building project serves as the collateral, and loans can be revolving or non-revolving.
  • Working CAPline: This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth and recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.
With the exception of the Builders CAPLine, the maximum maturity on a CAPLine loan is 10 years. Builders CAPLine loans must not exceed five years. Holders of at least 20 percent ownership in the applicant's business are required to guarantee the loan.






504 Loans

Long-term, fixed-rate financing of up to $5 million for major fixed assets

What is the 504 loan program?

The CDC/504 Loan Program provides long-term, fixed-rate financing of up to $5 million for major fixed assets that promote business growth and job creation.

504 loans are available through Certified Development Companies (CDCs), SBA’s community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.

  • Maximum loan amount of $5 million
  • Interest rate Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
What is the 504 loan program?
To be eligible for a 504 Loan, your business must:
  • Operate as a for-profit company in the United States or its possessions
  • Have a tangible net worth of less than $15 million
  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application
  • Other general eligibility standards include  falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.
  • Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.

How do I use a 504 loan?

A 504 loan  can be used for a range of assets that promote business growth and job creation.

These include the purchase or construction of:
  • Existing buildings or land
  • New facilities
  • Long-term machinery and equipment

Or the improvement or modernization of:
  • Land, streets, utilities, parking lots and landscaping
  • Existing facilities

A 504 loan cannot  be used for:
  • Working capital or inventory
  • Consolidating, repaying or refinancing debt
  • Speculation or investment in rental real estate

Important Information

An SBA loan is for you if you have:
  • Acceptable credit history
  • A promising business venture
  • A proven history of ability and expertise in this line of business

Frequently approved applications include:

  • The purchase or recapitalization of an existing business
  • The purchase or startup of a recognized national franchise with a good history of profit and success

Loan Amount:
Government-guaranteed loans on businesses range up to $5,000,000.  We also consider USDA B&I loans, (United States Department of Agriculture Business and Industry).

The total amount of agency loans to one borrower must not exceed $10,000,000.
  • Exceptions are made under certain circumstances.

Other Offerings:
We also consider USDA B&I loans, (United States Department of Agriculture Business and Industry). The total amount of agency loans to one borrower must not exceed $10,000,000. Exceptions are made under certain circumstances.

Equity Requirements:
Equity requirements may vary. Your equity injection (down payment) could range from 0% – 30% cash or business net worth. 

Loan Purpose:
Businesses may obtain an SBA loan to do the following:
  • Construct, expand, or convert facilities
  • Purchase buildings, equipment or material
  • Obtain working capital