SBA 7a Loan
The SBA-Capital SBA 7a Loan is the most widely used loan available.
The loan can be used to buy out your partner provided they own 20% or more of the ownership. The loan is also popular to purchase existing or build from the ground up hotels, franchised restaurants, convenience stores, day cares, medical facilities, and most all “for profit business”. All SBA 7a Loans are assumable.
Benefits of an SBA 7a Loan
The reason for the SBA 7a Loan popularity is due to the many benefits borrowers receive. This loan is given a long repayment term of 25 years in order to reduce monthly payments. This type of loan is great for freeing up cash flow for business expansions. There is also working capital plus inventory included in the amounts allowed by SBA. The main purpose for the SBA 7a Loan is for businesses and start-ups can obtain the funding needed that may not be available through more conventional methods.
Funds for SBA 7a Loans
SBA 7a Loans can be used for many purposes as described below:
SBA 7a Real Estate
- New Business
- Complete renovations
- Expansion
- Lease hold agreements
- Refinance current commercial real estate
SBA 7a Business Acquisition
Purchase another business that is including or excluding real estate such as:
- Franchise
- Professional practice.
SBA 7a Start-Up
Loans up to $5,000,000 for franchise businesses such as:
- Restaurants
- Hotel/Motels
SBA 7a Industry Types
This allows financing for most “for profit” industries such as:
- Gas Station, Lube Center, or Carwash
- Assisted Living Facilities
- Day Care
- Self-Storage
- Private Schools
- Manufacturing
- Heavy Equipment
- And more!
SBA 7a Working Capital
Typically available:
- Start-Up
- Expansion
- Equipment purchases
- Purchase Business or Acquisition
- Account Receivable
SBA 7a Soft Cost
Financing is available to soft cost related to collateral/loan such as:
- Appraisals
- Environmental
- Interim Interest
Terms and Conditions of an SBA 7a Loan
Real Estate loans are completed with 90% financing for up to a 25 year term. There is a prepayment penalty for the first initial three years.
Business Acquisition loans include 80% financing for up to a 10 year term. This loan has no prepayment penalty.
Refinancing loans include 100% financing for up to a 25 year term. There are applicable prepayment penalty for the initial three years on a term for greater than 15 years.
Interest Rates are based on the prime lending rate.
The SBA Guarantee fee is paid directly to the US Small Business Administration. The amount may vary based on the loan or guarantee amount. Please contact SBA-Capital for an itemized cost on specific loans that you may be considering at 214-726-9000 or by email at Pierce.pavbank@gmail.com.
There are no prepayment penalties on loans with maturity less than 15 years. The prepayment penalty for loans exceeding 15 years or more is 5% the first year, 3% the second year, and 1% the third year. This is a SBA requirement and it cannot be changed.