Can You Get Multiple SBA Loans?
Yes, as long as each of your loans fits within the SBA’s lending guidelines, there is nothing preventing you from having more than one SBA loan. This applies to both SBA 7(a) loans and SBA 504 loans . However, if you get approved for two SBA loans within a 90 day period, the SBA may treat it as o
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Yes, as long as each of your loans fits within the SBA’s lending guidelines, there is nothing preventing you from having more than one SBA loan. This applies to both SBA 7(a) loans and SBA 504 loans. However, if you get approved for two SBA loans of the same kind within a 90 day period, the SBA may treat it as one loan for underwriting purposes.
Who is Eligible for More Than One SBA Loan?
In order to take out more than one SBA loan, your business will need to:
Stay within the SBA’s maximum borrowing amount ($5 million for SBA 7(a) loans, $5.5 million for SBA 504 loans)
Remain within the SBA eligibility requirements for businesses
Keep up a good credit score (typically 680+)
Have collateral for the new SBA loan
Be in good standing on your current SBA loan
How Many SBA Loans Can You Take Out?
In theory, there’s no limit on how many SBA loans a borrower can take out, as long as they remain within the SBA guidelines. In some cases, rapidly-growing companies have taken out up to 9 SBA 504 loans within a 15-year period.
Energy Efficient SBA 504 Loans Allow Borrowers to Take Out $5.5 Million Per Project
If you’re interested in taking out an SBA 504 loan to purchase commercial real estate for your business, you might be interested to learn that the SBA 504 energy efficient loan allows borrowers to take out $5.5 million per project, instead of $5.5 million per business. That amount can also include SBA 7(a) loans. So, for example, a business could potentially take out two, three, or four SBA 504 commercial real estate loans for $5 million and combine each of them with a $500,000 SBA 7(a) loan for working capital in order to finance multiple projects at once.
SBA 504 energy efficient loans are available for businesses that:
Purchase or construct a building that uses 10% less energy than the one your business currently uses
Purchase a building that the business is leasing from and make upgrades that result in the building using at least 10% less energy that it did before
Purchase or construct a building that gets at least 10% of its energy from renewable sources (typically solar or wind)
Related Questions
What are the requirements for getting multiple SBA loans?
In order to take out more than one SBA loan, your business will need to:
- Stay within the SBA’s maximum borrowing amount ($5 million for SBA 7(a) loans, $5.5 million for SBA 504 loans)
- Remain within the SBA eligibility requirements for businesses
- Keep up a good credit score (typically 680+)
- Have collateral for the new SBA loan
- Be in good standing on your current SBA loan
In addition to the eligibility requirements, there are a few additional qualities which can increase your likelihood of SBA 7(a) loan approval:
- A good credit score - preferably above 680.
- A history free from recent bankruptcies, foreclosures, or tax liens.
- Having been in business for at least two years.
- The ability to provide collateral for loan requests over $25,000.
- The ability to make a down payment of 10% if your intended use of funds is to purchase a business, commercial real estate, or business-related equipment.
- Sufficient cash flow to meet your debt obligations.
- Sufficient working capital (once you subtract liabilities from assets).
- “Good character” according to the SBA (partially decided based on your track record of managing your resources and day-to-day business affairs).
What are the advantages of getting multiple SBA loans?
The advantages of getting multiple SBA loans include:
- Access to larger amounts of capital than a single loan can provide
- The ability to spread out payments over multiple loans, making them more manageable
- The ability to use different loan products for different purposes, such as using an SBA 7(a) loan for working capital and an SBA 504 loan for equipment purchases
What are the disadvantages of getting multiple SBA loans?
The disadvantages of getting multiple SBA loans include:
- Staying within the SBA’s maximum borrowing amount ($5 million for SBA 7(a) loans, $5.5 million for SBA 504 loans)
- Remaining within the SBA eligibility requirements for businesses
- Keeping up a good credit score (typically 680+)
- Having collateral for the new SBA loan
- Being in good standing on your current SBA loan
How long does it take to get approved for multiple SBA loans?
The length of time required for multiple SBA loans to be approved can vary drastically, but averages between 60 and 90 days. With that being said, it may take up to six months in some situations. There is no hard and fast rule here, and each situation will be unique.
For an SBA 504 loan, factors that go into determining the length of time to loan approval include:
- Your ability to gather all required information
- Your ability to satisfy all lender requirements for information and proof of income
- SBA approval (up to 7 days)
- Due diligence (2 to 3 weeks)
- Closing (up to 14 days)
For an SBA 7(a) loan, the SBA is able to expedite application approvals for borrowers dealing with certified lenders. A complete application is submitted and the SBA will confirm the lender’s decision by conducting a credit review only, instead of a complete review of the application. The process is much shorter than the standard 7(a) loan approval processing -- it only takes three business days.
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What types of businesses are eligible for multiple SBA loans?
Businesses that meet the SBA's eligibility requirements and have a good credit score (typically 680+), collateral for the new SBA loan, and are in good standing on their current SBA loan are eligible for multiple SBA loans. Other than general and mixed use buildings, eligible building types for 100% SBA 7(a) financing include:
- Medical and dental offices and clinics
- Office condos
- Professional office buildings
- Pharmacies
- Auto-repair businesses (including tires, muffler repair, and transmission firms)
- Pre-schools
- Certain fast-food/quick service restaurant buildings