What is a Working Capital Loan?
A working capital loan is a loan used to fund the everyday operations of a business, including marketing, employee payroll, and other short term expenses. Working capital loans are not used to fund fixed capital, such as heavy equipment, real estate, or other long term assets.
What Is the SBA Express Loan?
An SBA 7(a) Express Loan has fewer hoops to jump through than the other SBA 7(a) loans, since you won’t be waiting on as many back-and-forth approvals. Of course, you do still need to qualify, you’ll only be backed for up to 50% of $350,000, and an Express Loan may ultimately be more expensive for y
What is the Small Business Administration (SBA)?
The Small Business Administration, also known as the SBA, is a U.S. government agency tasked with providing assistance and support to small businesses across the country. Founded in 1953, the SBA’s activities are often summarized by using “three C’s” of capital, contracts and counseling.
What is a Small Business Administration (SBA) Loan?
SBA Loans are a flexible, competitively priced business financing option that the U.S Small Business Administration guarantees.
What is an SBA 7(a) Loan?
The SBA 7(a) loan is the Small Business Administration’s (SBA’s) most popular form of business financing. SBA 7(a) loans , which were issued in excess of $25 billion in 2017, can be used for both working capital and commercial real estate , making them an excellent choice for entrepreneurs with a
What is FICO SBSS?
If you’re applying for a small business loan, like the SBA 7(a) loan , there are two types of credit scores that can make a big difference: your personal credit score and your small business credit score. While your personal credit score is currently the more important of the two, small business
Veterinary Practice Financing Through The SBA 7(a) Loan Program
In 2017, veterinary practices and animal hospitals employed nearly 400,000 people across the U.S., while generating a staggering $42 billion in revenue. If you’re a veterinarian or animal hospital owner interested in purchasing or expanding your business, an SBA 7(a) loan could be your best option
SBA 7(a) Loans for Trucking and Transport Companies
Right now, there are approximately 500,000 trucking companies in the U.S., employing 3.5 million people and generating nearly $700 billion in revenue each year. Between 2006 and 2015, trucking and transport companies took out more than $774 million in SBA 7(a) loans, with an average loan size of $10
What is the SBA Veterans Advantage Program?
The SBA Veteran Advantage Program honors veterans and other qualified individuals with lower fees on all of their popular SBA loan products.
Can You Get an SBA 7(a) Loan for a Medical Practice?
Right now, there are over 230,000 medical practices in the United States, and if you’re a doctor looking to start, purchase, or expand your medical practice, an SBA 7(a) loan could be the perfect choice. SBA 7(a) loans are available for all kinds of medical practices, including physical therapy
What are SBA Microloans?
SBA Microloans, which come in amounts between $10,000 and $50,000, are the smallest loans offered by the Small Business Administration . SBA Microloans are ideal for small startups, borrowers with limited collateral, or those who just need a small financial boost to get through a rough period in th
Are there SBA Loans for Women Entrepreneurs?
According to the National Association of Women Business Owners (NAWBO), there are over 11.6 million women entrepreneurs across the U.S., generating approximately $1.7 in sales each year. And, just like other hardworking entrepreneurs, women need capital in order to start, maintain, and grow their bu
Seller Notes in Relation to SBA 7(a) Loans
A seller note is a loan given by the current owner of a business to a new buyer, often in order to bridge the gap between the amount of financing the buyer has and the purchasing price of the business. For example, if a business was being sold for $6 million, and the buyer only had $5 million in SB
How Does the SBA Define a Small Business?
Due to its mission, the SBA only guarantees loans to small businesses— but what is a “small business”? Well, according to the SBA , a small businesses have a maximum of anywhere between 250 and 1500 employees— all depending on the specific industry the business is in. Additionally, businesses have
SBA Loans vs. Conventional Loans: What's the Difference?
When it comes to getting financing for your small business, one of the biggest choices you’ll have to make is whether to go with an SBA loan or a conventional loan. Conventional, non-SBA loans may provide larger loan amounts, and can sometimes have lower interest rates than their SBA counterparts. H
Can a Non-U.S. Citizen Apply for an SBA Loan?
If you’re not a U.S. citizen, can you still qualify for an SBA loan for your small business? The answer is yes— but not in all cases. In general, legal permanent residents (LPRs), also known as green card holders, can qualify for SBA financing . However, if a borrower is not a legal permanent res
How to Get Your SBA Loan Approved Faster
When you’re in the market for a business loan, getting access to the funds you need quickly is definitely a priority. If you work with an SBA Preferred Lender, you’ll get your loan processed far faster than working with another lender.
SBA Loan Requirements: Credit Scores
If you’re considering applying for an SBA loan , like the SBA 7(a) loan , having good credit is a must. However, not every SBA loan requires a borrower to the same credit score, or range of scores, to be eligible . In this article, we’ll pick apart the most popular kinds of SBA loans and the cred
What are SBA Community Advantage Loans?
If you’re a minority business owner, or a member of another underserved community, it can be especially challenging to get financing for your small business. Fortunately, the Small Business Administration is committed to providing small business loans to underserved populations through its Communi
Saving Up a Down Payment for an SBA Loan
The SBA7a loan, backed by the Small Business Administration , has made it easier for new borrowers and so-called “weak” borrowers to secure the capital that they need to open a small business. But as with most other loans, borrowers still have to be able to come up with a down payment.
Can You Refinance an SBA Loan?
In most cases, the SBA will not permit a borrower to refinance an SBA-guaranteed loan such as the SBA 7(a) or SBA 504 loan. However, this doesn’t mean that borrowers who have trouble paying back their loans or want to achieve better loan terms don’t have any options.
Can SBA Loans Be Used for Real Estate Investment?
SBA loans cannot be used for businesses in which the primary source of income is real estate investment. In fact, SBA loans can only fund real estate that is owner-occupied, and will be used primarily by the business that is taking out the loan. However, in most cases, a business only needs to oc
SBA 7(a) Loans for Beauty Salons
Right now, there are about 82,000 beauty salons in the U.S., generating approximately $20 billion in revenue each year. From 2006-2015, beauty salons across the country took out more than 9,000 SBA 7(a) loans , with a total loan amount of more than $1 billion, and an average loan size of around $11
What is the Required Debt Service Coverage Ratio (DSCR) for SBA 7(a) Loans?
Debt service coverage ratio, or DSCR, is one of the most important factors lenders look at when approving a loan. DSCR is calculated by dividing a business’s net operating income by their total debt service. For SBA 7(a) financing , most lenders want a borrower to have a DSCR of 1.25x or more.
Can You Get Marina Financing With An SBA 7(a) Loan?
In 2017, the marina and boatyard industry generated approximately $5 billion in revenue and employed more than 35,000 people across the United States. If you’re interested in purchasing or expanding a marina or boatyard, or refinancing debt on a marina or boatyard that you already own, an SBA 7(a
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
Do SBA 7(a) Loans Have Prepayment Penalties?
Like many kinds of loans, SBA 7(a) loans do have prepayment penalties, which are fees designed to compensate a lender should a borrower decide to pay off their loan early. Since lenders depend on getting interest payments for a specific number of years when they issue a loan, prepayment penalties
New SBA Loan Rules Make It Easier for Borrowers to Acquire Businesses
On January 1st, 2018, the SBA enacted a series of new rules making it easier for individuals to use SBA 7(a) loans to purchase a business. Specifically, the SBA modified its Standard Operating Procedures (SOPs), including SOP 50 10 5(J) , which reduces equity requirements for business acquisiti
SBA 7(a) Loans for Manufacturers
In the United States, the manufacturing industry employs more than 12 million people— and produces nearly 20% of all the world’s goods. If you own and operate a manufacturing company, and you want funds to expand your firm, build a new headquarters, acquire a competitor, or even refinance your busin
Getting an SBA 7(a) Loan to Buy Out a Partner
If you run a business with one or more partners, there may come a day when you want to buy one or more of them out. You might simply have different goals, or the partner may want to retire, move to a new location, or shift their career into a new industry altogether. But, whatever the reason, buyin
SBA Loans for Plumbers
The U.S. plumbing industry generates more than $100 billion in revenue each year, and employs nearly 500,000 Americans, making it an essential facet of the U.S. economy. If you own a plumbing business, and you want to expand your company, buy a competitor, or refinance business debt, getting SBA fi
Are There SBA 7(a) Loan Programs for Minorities?
Right now, there are more than 11 million minority-owned businesses across the U.S.— and that number is growing rapidly each year. While there are no SBA 7(a) loan programs specifically for minorities, the SBA 8(a) Business Development program is designed to favor minority-owned businesses. Plus
What are the Pros and Cons of SBA 7(a) Loans?
SBA 7(a) loans are some of the most small business popular loan products in the U.S, with a total loan volume of almost $26 billion in 2017 alone. And, while these loans can provide businesses with the capital they need at extremely affordable rates, they aren’t without their disadvantages. In this
What is a Low-Doc SBA Loan?
If you’re a borrower who wants an SBA loan fast, a low-doc SBA loan could be the ideal solution. Unlike typical SBA 7(a) loans , which may require up to 2-3 months to be finalized, low-doc loans can be completely finalized within 45 days (or even sooner.) Low-doc loans offer borrowers between $25
Can You Get an SBA 7(a) Loan for a Medical Center?
Americans spent over $3 trillion on healthcare in 2016 alone, making it one of the largest industries in the entire country. And, while much of the industry is dominated by large public and private hospitals, as well as doctors’ offices , smaller, private medical centers also occupy an important ma
How Much is the SBA 7(a) Down Payment?
SBA 7(a) loan downpayment is lower than a standard business loan. If you qualify, you may pay as little as 5 or 10% down, depending on the lender’s policies, purpose of the loan, amount borrowed, your credit history, and more.
SBA Loans for Laundromats and Dry Cleaners
In 2017, laundromats and dry cleaners generated $14 billion of revenue and employed nearly 200,000 workers across the U.S. While the industry has faced serious threats due to shifting consumer preferences and an increase in in-home laundry machines, there’s still a huge demand for laundry and dry cl
SBA 7(a) Loans for Landscaping Companies
There are nearly 500,000 landscaping businesses in the United States, producing more than $60 billion in revenue each year and employing almost a million people. From 2006-2015, landscaping firms around the U.S. took out more than 8,000 SBA 7(a) loans , with a combined loan volume of almost $1 bill
SBA 7(a) Loans for Liquor Stores
There are nearly 50,000 wine, beer, and liquor stores througout the United States, generating an annual revenue of approximately $58 billion. Between 2006 and 2015, liquor stores took out more than $2.3 billion in SBA 7(a) loans, with an average loan size of $366,000. If you’re looking to purchase,
SBA 7(a) Loans for Tax Preparation Firms
With more than 121,000 tax preparation firms in the U.S. generating more than $10 billion in annual revenue, it’s safe to say that the tax prep industry is booming. Plus, SBA loan repayment data from the years 2000-2016 places three tax preparation firms as among 50 the best franchises to own in the
SBA 7(a) Loans for Insurance Agencies
Right now, there are more than 1.1 million insurance agents, brokers, and affiliated employees in the United States— all working as part of an industry that wrote more than $1.2 trillion in premiums in 2017 alone. So, if you’re an insurance agent interested in starting, purchasing, or expanding an i
Small Business Loans for Real Estate Agents
In 2017, over 6 million homes were sold across the United States, and nearly 90% of sellers used a real estate agent to help them through the process. Right now, there are over 2 million Americans with active real estate licenses, and over 1.3 million members of the National Association of Realtors
SBA Loans for HVAC Companies
In the United States, the heating and cooling (HVAC) industry generates approximately $93 billion in revenue each year, and employs more than 50,000 workers across the country. If you own or operate an HVAC business and you need funding to maintain or grow your firm, getting an SBA loan could be a
Coronavirus and SBA Loans
Small businesses impacted by the COVID-19 Coronavirus may want to apply for an SBA loan through the Economic Injury Disaster Loan Program, the SBA 7(a) loan program, or the SBA Express Loan program.
Are SBA 7(a) Loans Available for Franchises?
If you have a franchise, can you get funding for it with an SBA 7(a) loan ? The answer is yes; in fact, about 10% of all SBA loans go to franchises. Despite that, not all franchises are available for funding through the SBA.
Can You Use a Gift as a Down Payment on an SBA 7(a) Loan?
Fortunately for SBA loan borrowers, there’s nothing preventing you from using a gift as a down payment on an SBA 7(a) loan . In most cases, however, the gift must be a from a family member. Otherwise, the lender may be concerned that the gift is actually a loan in disguise— and, that it might h
Can You Combine an SBA 7(a) Loan with an SBA 504 Loan?
Many borrowers appreciate the fact that SBA 7(a) loans can be used for both working capital and commercial real estate— which makes them one of the most versatile loans on the market. However, their close cousins, SBA 504 loans , which can only be used for commercial real estate, often have lower
Can You Get a Gym Equipment Loan Through the Small Business Administration?
Gyms and health clubs across the U.S. produced approximately $80 billion in revenue in 2017 alone. And, if you’re a gym or health club owner, you might be looking to get a gym equipment loan through the SBA. Fortunately, the SBA 7(a) loan program, as well as the SBA 7(a) Express Loan both permit
Can You Get an SBA 7(a) Loan for a Funeral Home?
In 2017, the funeral home industry employed approximately 120,000 people across the United States, while taking in more than $15 billion in revenue. If you currently operate a funeral home or are considering opening one, the SBA 7(a) loan could be a fantastic option. In addition to funeral homes,
SBA Loans for Computer Repair Companies
In 2017, the U.S. computer and electronics repair industry took in $18 billion of revenue and employed nearly 140,000 workers across the country. While the industry has been challenged by the reduced costs of electronics, companies in the right market can still take in a big profit. So, if you’re lo
SBA 7(a) Loans for Builders and Construction Companies
With more than 650,000 construction firms in the U.S. building more than $1 trillion of buildings each year, it’s never been a better time to be in the construction industry. If you’re interested in expanding a construction company that you currently own, acquiring an existing construction business,
SBA 7(a) Loans for Dental Labs
Dental labs are an approximately $32 billion global industry— and the market is growing larger each year with the increase in oral diseases and a greater need for dental prosthetics for older patients. If you own or operate a dental lab, and you’re looking for a source of financing to expand your bu
Can You Get an SBA 7(a) Loan for a Dental Office?
There are nearly 200,000 dentists across the United States, many of whom are looking to start, expand, or purchase a dental practice. If you’re one of them, an SBA 7(a) loan could be a great way to get the financing you need. SBA 7(a) loans are available for all kinds of dental practices, includ
Goodwill in Relation to SBA 7(a) Loans
Goodwill is an intangible asset that arises when a new owner purchases a business. Goodwill only arises when the new owner purchases the business for more than the tangible and intangible assets, minus the business’s liabilities. In general, SBA loans limit the amount of goodwill involved in a bus
The Top 5 Best Working Capital Loans for Small Businesses in 2018
Working capital is essential for any functioning business; without enough of it, business owners can’t afford to pay their employees, fill orders, or even keep their lights on. Even if a business has thousands (or millions) in unpaid invoices, if they don’t have enough cash to operate, they can easi
Can You Use a 401(k) as an SBA Loan Downpayment?
Getting the money for a down payment can be one of the most challenging parts of applying for an SBA loan . However, if you have a 401(k) account, or another approved tax-deferred retirement account with at least $50,000 in it, you may be able to use those funds as a down payment on an SBA loan —
Getting 100% Commercial Real Estate Financing With An SBA 7(a) Loan
While most forms of SBA 7(a) loans require at least 5-10% down, some lenders are now offering 100% commercial property financing with SBA 7(a) loans. That means that, if they qualify, a borrower doesn’t have to put anything down to acquire a commercial property with a 7(a) loan .
What Are The Best Franchises to Start With an SBA 7(a) Loan?
While you might already know that SBA loans are available to many franchises , you might not know how they stack up against each other. In this article, we’ll take a look at some of the most successful franchises that can be funded with SBA loans and compare their performance based on their loan
Are SBA 7(a) Loans Assumable?
Fortunately for borrowers, SBA loans, including the SBA 7(a) loan , are fully assumable with SBA approval. However, if you’re selling your business, getting approval from the SBA for another borrower to assume your loan can be somewhat complex. In particular, the SBA will look to ensure that the ne