SBA 7(a) Loans

USES OF PROCEEDS·         

Equipment purchases (machinery, business vehicles)

Permanent working capital

Inventory

Business expansion

Business purchase/acquisition

Real estate purchase      

Land acquisition and real estate construction      

Real estate improvements      

Refinance of existing business debt       

Startup costs (case-by-case basis) AMOUNTS·        

Minimum- $10,000     

Maximum – $5 Million 

MATURITY·        
Inventory or working capital- Typically structured at 7 years but not to exceed a maximum of 10 years     

Equipment, fixtures, or furniture- Typically structured at 7 years but not to exceed a maximum of 10 years, it may not exceed the economic useful life.

Real Estate, including acquisition, rehabilitation, renovation, or construction- Up to 25 years plus any interest period to reasonably complete the construction or improvements·        

7(a) Refinancing- Must coincide with the remaining useful life of the assets being refinanced or use of proceeds chart

INTEREST RATE/OTHER TERMS

Variable Rates – based on Prime Rate based on dollar amount of loan, term and collateral.Fully-Amortized over life of loan (No Balloon Payments)  Pre-Payment Penalty- under 15 years NoneOver 15 years (1st 3 years)- 5,3,1

SBA Guaranty Fee

$1 Million or less= 0.0% $1M – $2M = 1.45% (Up to $1M plus 1.70% over $1 Mil)

$2,000,001- $5M= 3.5% (up to $1M plus 3.75% over $1 Mil (SBA changes SBA fees from time to time)·    

Lender may charge up to $2500 packaging fee. 

WHO QUALIFIES·           
Must be for profit and meet size standards

Good Character and credit management

Must be an eligible type of business 

BENEFITS FOR BORROWERS·          
Long term financing           
Improved Cash flow          
Fixed Maturity  
No balloon payments
No prepayment penalty under 15 years