SBA Loan Requirements & Eligibility Discover how our SBA loans can help your business grow. Our team of Small Business Administration (SBA) experts can help you navigate the eligibility of your company and the use of funds. We have the knowledge and experience to guide your business through the SBA process from application to closing. SBA ProgramUsesBank FeesSBA Fees SBA 504 (10-Year Debenture)Capital EquipmentVaries: typically 0.5% – 1 % of the bank portion0.5% of the bank portion, plus approximately 2.65% of SBA’s portion1 SBA 504 (20- or 25-Year Debenture)Real Estate Varies: typically 0.5% – 1% of the bank portion, more if construction loan0.5% of the bank portion, plus approximately 2.65% of SBA’s portion1 7a Small & 7a Large LoansGeneral Purpose Term LoanPackaging Fee: Capped at $2,500 Construction loans may require extraordinary servicing fee of 1%Guaranty Fees Loans up to $1,000,000: waived through 9/30/2024 Loans $1,000,001 – $5,000,000: Loans with terms up to 12 months (no renewals) – 0.25%; Loans with terms longer than 12 months – varies on the size of loan3 SBA ExpressGeneral Purpose Lines of Credit up to $500,000Packaging Fee: Capped at $2,500 Construction loans may require extraordinary servicing fee of 1%Guaranty Fees Loans up to $500,000: waived through 9/30/2024 Loans $1,000,001 – $5,000,000: Loans with terms up to 12 months (no renewals) – 0.25%; Loans with terms longer than 12 months – varies on the size of loan3 Working Capital CAPlineGeneral Purpose Lines of Credit from $500,001 to $5,000,00020.5% – 1% annuallyGuaranty Fees Loans up to $1,000,000: waived through 9/30/2024 Loans $1,000,001 – $5,000,000: Loans with terms up to 12 months (no renewals) – 0.25%; Loans with terms longer than 12 months – varies on the size of loan3 Export ExpressExport Loans and Lines up to $500,000Packaging Fee: Capped at $2,500Guaranty Fees Loans up to $500,000: waived through 9/30/2024 Loans $1,000,001 – $5,000,000: Loans with terms up to 12 months (no renewals) – 0.25%; Loans with terms longer than 12 months – varies on the size of loan3 International Trade LoanTerm Loans to support Exporters up to $5,000,000Packaging Fee: Capped at $2,500Guaranty Fees Loans up to $1,000,000: waived through 9/30/2024 Loans $1,000,001 – $5,000,000: Loans with terms up to 12 months (no renewals) – 0.25%; Loans with terms longer than 12 months – varies on the size of loan3 Eligible Uses of Funds Purchasing Owner-Occupied Real Estate Both the SBA 7a Small, 7a Large, and 504 loan programs can be used to fund owner-occupied commercial real estate. This includes projects that involve the purchase or refinancing of an existing building. The operating company must occupy and actively use 5 or more of the property, and then may lease the rest of the property to a third party. Financing Owner-Occupied Construction SBA 7a Small, 7a Large, and International Trade loans offer guaranteed loans that can be used to construct owner-occupied real estate, or fund an expansion of your current owner-occupied facility. The SBA 504 loan program only provides take-out financing, but can be used to follow a conventional construction loan for this purpose. This will typically require additional collateral to be pledged until the SBA take-out is achieved. The construction project must: Initially occupy and actively use 60% or more of the rentable square footage Intend to occupy additional space within 3 years, and at least 80% within 10 years The bank and SBA generally do not allow self-construction (where borrower acts as the general contractor) Tenant Improvements The SBA 7a Small and 7a Large loan programs can be used to fund tenant improvements in a leased space, however very specific rules must be followed, such as: Landlord must be willing to assign the lease rights to the bank, and subordinated lessor interests in collateral to the bank Lease term but equal or exceed term of loan Additional collateral is usually required Financing Exporters The International Trade, Working Capital CAPline and the Export Express loan programs can be used to finance most of a business’ needs relating to exports, whether those are products or services. The International Trade loan can be used to fund equipment, fixed assets, owner-occupied real estate, or permanent working capital and inventory for an exporter. The Working Capital CAPline can include foreign accounts receivable and export inventory in the borrowing base, but rules apply. Please contact one of our bankers for more information about the export rules for Working Capital CAPlines. Finally, the Export Express program can be used to finance the temporary working capital needs relating to timing gaps between paying for goods or labor and getting paid by the client (up to $500,000). Business Acquisitions The SBA 7a Small, and 7a Large loan programs can be used to support the purchase of a business or the buyout of a partner. It can also now be used to finance the purchase of part of a business. You must have a business plan or projections. If you need help creating these, please contact one of our SBA experts. Financing Equipment The SBA 7a Small, and 7a Large loan programs can fund the purchase of vehicles, furniture and other equipment actively used in the business. Financing Capital Equipment Both the SBA 7a Small, 7a Large, and 504 loan programs can be used to purchase manufacturing and capital equipment. These are machinery and equipment with a useful life of at least 10 years which is typically affixed to real estate. It does not include any kind of rolling stock. Financing Business Expansion The SBA 7a Small and 7a Large loan programs may be used for general business expansion (new location or territory). Uses include hiring associates, purchasing inventory and equipment, or completing leasehold improvements. Refinancing Business Debt The SBA 7a Small, 7a Large, and 504 (if owner-occupied real estate is being refinanced) can be used to refinance business debt. To be eligible, the existing debt must be on unreasonable terms, such as: High interest rates Balloon payments or demand structures Term much shorter than useful life of asset financed Business credit cards Typically cannot be at the same bank No personal credit cards or personal loans Requires that the bank takes the same collateral and guarantees, and the existing loan must have been used for an eligible business purpose. Financing Temporary Working Capital Have higher client concentrations, need higher advance rates, or have higher leverage but haven’t been in business long? The SBAExpress, Export Express, and Working Capital CAPlines can be used to provide lines of credit to support temporary fluctuations in accounts receivable and inventory. Typically, up to 80% of eligible accounts and up to 50% of eligible inventory is allowed to be financed and can include foreign accounts receivable and government receivables. Starting a Business or Franchise The SBA 7a Small or 7a Large loan programs allow the bank to underwrite independent and franchise businesses less than two years old. The borrower should be prepared for 25% or more equity and provide sufficient collateral to support the full request, and owners must have strong experience running a similar business and strong credit and outside sources of income. You must have a business plan or projections, if you need help creating these, please contact one of our SBA experts. Eligibility requirements may vary based on loan type. To qualify for an SBA loan, your business generally must: Be located in the U.S. or its territories Be operated as a for profit business Have owners/managers with relevant experience Have a positive net worth (unless properly mitigated) Meet SBA’s definition of a small business The business must not: Be passive Be a lender, life insurance company, money service business or investment brokerage The owners must: Be U.S. citizen or legal permanent resident Be of good character Not affiliated with employee of lender Ineligible use of SBA funds include: Speculative Investment Payments or distributions to an associate of the applicant Floorplan financing Investments in real or personal property acquired and held primarily for sale or lease Payment of delinquent taxes SBA Loan Overview LEARN MORE SBA FAQs LEARN MORE Small Business Administration Team LEARN MORE Let’s Get Started! First Name(Required)Last Name(Required)Business NameBusiness Location (City, State)(Required) City Select a StateAlabamaAlaskaAmerican SamoaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaGuamHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaNorthern Mariana IslandsOhioOklahomaOregonPennsylvaniaPuerto RicoRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahU.S. Virgin IslandsVermontVirginiaWashingtonWest VirginiaWisconsinWyomingArmed Forces AmericasArmed Forces EuropeArmed Forces Pacific State Service or Product OfferedPrimary Usage of FundsPhone(Required)Email Δ 1Prepayment: SBA’s portion may only be prepaid in whole, but the bank’s portion may be prepaid in part or whole. SBA charges a declining prepayment penalty for the first 10 years on real estate and for the first 7 years on equipment loans. 2There is no program minimum, but because of other products that fill smaller needs, this is typically the maximum. 3For fiscal year ending 9/30/2024: Loans up to $1,000,000: 0% of guaranteed amount; Loans from $1,000,001 to $2,000,000: 1.45% of the guaranteed portion up to $1,000,000, plus 1.70% of the guaranteed portion of the loan in excess of $1,000,000; Loans $2,000,001 and greater: 3.50% of the guaranteed portion of the loan up to $1,000,000, plus 3.75% of the guaranteed portion of the loan in excess of $1,000,000. Multiple loans approved within 90 days are added together to determine the guaranty fee.
