SBA Loans
The lowest rates and longest terms available, for those who can wait.
An SBA loan is a bank loan with the federal government standing behind part of it. The guarantee lets the bank lend where it otherwise would not, at rates the programme caps, over ten to twenty five years. For an established business that can wait, nothing else comes close on cost. A $500,000 7(a) loan over ten years costs less each month than a $150,000 advance over twelve.
The catch is time and paperwork. A well prepared file with a preferred lender closes in four to eight weeks. A poorly prepared one drifts for months and is declined for a reason that could have been fixed on day one. We work with preferred lenders, which approve without sending the file to the SBA itself, and we assemble the package the way those lenders want to see it.
How it works
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The 7(a) programme covers working capital, refinancing of expensive debt, equipment, business acquisitions and some real estate, up to $5,000,000. The 504 programme covers owner occupied real estate and heavy equipment, through a bank and a certified development company together.
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You supply three years of business and personal tax returns, year to date financials, a debt schedule and, for larger loans, a short business plan. We build the package and field the lender's questions.
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Approval, closing and funding take four to eight weeks with a preferred lender. Real estate takes longer.
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Repayment is monthly: ten years for working capital and equipment, up to twenty five years for real estate.
Where it fits
- ●Established businesses, two years or more, profitable on their tax returns, with owner credit of 680 or above.
- ●Refinancing a stack of short term advances or high rate loans into one long, affordable payment.
- ●Buying a business, a franchise, or the building you operate from.
- ●Owners who can allow one to two months and want the lowest possible payment.
Where it does not
- ●Anything needed this month.
- ●Businesses showing a loss on their tax returns, or owners with recent tax liens, defaults on government loans or a bankruptcy in the last few years.
- ●Owners unwilling to pledge personal collateral they have. The SBA requires it when it exists, though a lack of collateral on its own does not cause a decline.
What it typically costs
7(a) rates are capped at prime plus a margin set by loan size, which in practice means annual rates from the high single digits to the low teens. 504 loans carry fixed rates tied to Treasury yields.
The SBA guarantee fee runs from nothing on smaller loans to about 3.75 percent of the guaranteed portion on the largest, and is normally financed into the loan. Lender packaging and closing costs vary.
Enrichment Capital charges you nothing.
Ranges describe offers commonly seen through our network and are not a quote. Every offer we present shows its own amount, cost, term, payment schedule and total repayment before you sign.
Who usually qualifies
- ●A for profit US business, operating for two years or more in most cases.
- ●Owner credit of 680 or above, no recent bankruptcy, taxes current.
- ●Positive net income on recent returns, or a clear path to it with the loan.
- ●Equity in the deal: 10 percent or more for acquisitions and start ups.
Questions owners ask
How long does an SBA loan take?+
Four to eight weeks from a complete package to funding with a preferred lender. Real estate and acquisitions take longer because of appraisals and due diligence.
What is the maximum SBA loan amount?+
$5,000,000 under 7(a). 504 projects can be larger because the bank portion is not capped.
Can an SBA loan refinance merchant cash advances?+
Sometimes. Lenders refinance short term debt when the business is profitable and the refinancing clearly improves cash flow. Heavily stacked positions have to be reduced first.
Is a down payment required?+
For working capital and equipment, often not. For acquisitions and start ups the SBA requires at least 10 percent equity from the buyer.
What if I am declined for an SBA loan?+
You hear why, in plain terms, and whether a term loan, equipment financing or a line of credit can bridge the gap while the business grows into eligibility.
Begin with a conversation
One application, a few minutes, your last three months of statements. A member of our team reads the file personally and tells you where you stand, usually within one business day.
Apply for financing