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.
