SBA Loans

Learn More of SBA 7(a) loans & SBA 504

The 7(a) Loan Program is the SBA’s primary program for providing financial assistance to small businesses. Borrowers can receive up to $5 million through the program, with repayment terms of up to 25 years. SBA 7(a) loans are attractive to small businesses because they offer high leverage and fixed-rate terms. 

SBA 7(a) Commercial Property Loan Highlights

Eligible Properties: Office, Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage, Hotel/Motel

Loan amount range: Maximum of $5,000,000

Loan Term: Up to 25 years for commercial properties

Maximum LTV: 75% For Loans Over $150,000

Minimum DSCR: 1.25x

Recourse:Typically Full-Recourse

Prepayment: For loans with maturities of 15 years or more if prepaid during the first 3 years. (5% year 1, 3% year 2 and 1% year 3)

Collateral: SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount on loans over $350,000. Personal guarantees are required for owners that have a 20% or more stake in the business

SBA 504 Loan Highlights

Eligible Properties: Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage, Hotel/Motel, Restaurants, Daycare facilities, Assisted Living,

Loan amount range: Up to $5 million or $5.5 for manufactures and energy-efficient projects

Loan Term: 10 or 20 years

Amortization: 10 to 30 years

Maximum LTV: Up to 90% LTV. Hospitality is limited to 85%

Minimum DSCR: 1.20x

Minimum Debt Yield: 7-8%

Recourse: Full recourse.

Prepayment: Prepayment penalty declines during the first 10 years to 0%. The loan is assumable and the prepayment penalty does not apply.

Collateral: The project assets that are being financed are used as collateral. The principal owners are required to produce personal guarantees.

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