SBA 7(a) loans are the most common type of SBA loans and can be used for almost any business purpose. Businesses looking to finance their working capital needs willlikely find SBA 7(a) loans to be a good financing solution. These loans are offered in amounts up to $5 million and can be used for working capital, refinancing debt, or purchasing a business, real estate, or equipment.
SBA 7(a) loans up to $5 million forworking capital are now starting at interest rates of 2.00% to 4.75% plus prime rate,typically 5% -10%. If your credit score is above 680 and have been in business at least two or more years, then your business qualifies. Two popular loans, the SBA Express Loan and SBA Advantage Loan, are part of the 7(a)-loan program.
Our Lighthouse SBA loan program experts will guide you through the process every step of the way. SBA 7(a) loans are available to both startups and more established small businesses and have a variety of qualification requirements. These SBA loan eligibility requirements include being a small business located in the United States with a demonstrated need for the loan, operating in an eligible industry, and owned by U.S. citizens.
Are you a business owner? Is your business having cash flow problems? In today's world the only thing keeping a small business owners company growing is positive cash flow and robust working capital. Just because a customer is late on an invoice doesn’t mean that you can be late on payroll. And if you want to expand your business or order more inventory, you’re going to need cash on hand to do it.
As skilled as you may be at forecasting and managing your income and expenses, opportunities can come at you unexpectedly. For example, maybe that big-box store wants to place a large order for your products — that means you must put in an order first and accept the chain’s long payment terms. Would you be able to afford it?
Fortunately, at Lighthouse Business Capital we have access to the best small business loans in the marketplace. As a marketplace broker platform, we can offer many options available to small businesses that other traditional banking options may not.
To qualify for an SBA 7(a)loan, you will generally need to meet these minimum requirements:
- Minimum credit score: 680
- Other SBA loan requirements: No recent bankruptcies, foreclosures, or tax liens
- Collateral: While the SBA will not refuse to guarantee a loan due to insufficient collateral, a lender is less likely to approve a loan that isn't backed by sufficient collateral; loans of less than $25,000 don't need to be collateralized.
- Down payment: At least 10% down payment if you are using the loan to purchase a business, commercial property, or equipment.
Start businesses will need to meet the above requirements for an SBA 7(a) loan and have:
- Demonstrated experience: Startups need to show the lender they sufficient industry or business management experience and strong business plan. Your business plan will need to have a detailed written analysis an provide financial projections for your business' performance over the next three to five years.
- Larger down payments: Most SBA lenders will require an equity injection ordown payment of at least a 20% to 30% of your total project costs, or $20 to $30 for every $100 you want to borrow.
- Excellent credit: In our experience, it is very difficult for anyone other than the best borrowers-credit score of at least 700, high net worth, and real estate with significant equity-to get approved for SBA financing as a startup.
Talk to a Lighthouse Loan Representative today: (855) 322-3807
SBA 7(a) Loans Rates & Terms
The typical SBA 7(a) loan terms are:
The typical SBA 7(a) loan terms are:
- Loan amount: UP TO $5 million
- Repayment terms: Up to 10 years to 25 years for commercial real estate
- Repayment cycle: Monthly
- Time to funding: 30 to 90 days or more
- Interest rates: 2.00% to 4.755 plus prime rate, typically 5% to 10%
- Origination fee: 0.5% to 3.5%
- Loan packing fee: $2,000 to $4,000
- SBA guarantee fee: 2% to 3.5%
While the SBA does not set a minimum loan amount, most lenders will not consider loans that are less than $30,000.
The SBA 7(a) loan rates depend on a variety of factors, such as your credit score and length of the repayment term, and it could be fixed or variable. The SBA limits the rate that lenders can charge for an SBA 7(a) loan, with a maximum rate set at 2.00% to 4.75% over prime rate.
Applying for an SBA 7(a) Loan
Lighthouse Business Capital can help you put together the SBA loan applications and find the lenders most likely to work with your industry. Applying for an SBA loan is a time-consuming and complicated process. You're required to provide an extensive list of documentation to support your application.
Generally, an SBA loan can take 45 to 90 days or more before you even get funded, if you're approved at all. Our in house underwriting department are a well experienced in navigating these requirements and have streamlined the process to drastically cut down paperwork and application times. Lighthouse Business Capital routinely closes SBA loans in two to three weeks.