SBA 7a Loan for Commercial Property, Working Capital, Debt Consolidation & More
The SBA 7a loan is one of the best commercial mortgage options currently available. 
According to the Small Business Administration, the 7a loan can (technically) be used for "any legitimate business purpose," but loans that include real estate are much easier to do at the moment.
Please note: the Small Business Administration defines what can be done and they guarantee loans for lenders, but you still have to rely on a bank or an SBA approved lender to secure financing.
Alternatives to SBA 7a loans
Green SBA Loans
SBA 7a Eligible Uses
The 7a loan can be used for most business purposes, including, but not limited to:
- Refinance of Commercial Real Estate
- Construction of a New Building
- Refinance of Business Debt
- Purchase of an Existing Business
- Working Capital
- Purchase of Real Estate
- Tenant Improvements
- Equipment Financing
- Leases
- Inventory
SBA 7a Loan Rates
SBA 7a loan rates are typically Prime plus a margin not to exceed 2.75% and the rate you can expect to receive is typically based on the strength of your loan.
The 7a (and the 504 program) are some of the only commercial loans available for those who do not have a lot of equity or a large down payment since both can be approved with as little as 10% down or 10% equity.
7a loans are currently available up to $2 million, although the maximum loan limit could soon be raised to $3 million or possibly $5 million.
SBA 7a vs. 504?
The SBA 7a loan is much easier to be approved for at the moment because they are safer and more profitable than a 504 loan. Here's why:
- Banks and lenders can sell the loans for a nice premium (profit) on the secondary market.
- 7a loans currently offer a 90% "guarantee" from the SBA.
The 504 loan, while an excellent low risk loan, only has a 50% guarantee from the SBA and in the case of default the bank is on the hook for the 50% of what is owed.
The current 90% guarantee of the 7a loan, however, means the bank is covered for up to 90% of the loan amount.
This combination of safety and profitability make the 7a loan much more "approve-able" in the current environment.
SBA 7a Refinance
In addition to commercial real estate, the SBA 7a loan may also be your best option to refinance your current business loan. It can be used to refinance the following types of business debt:
- Long term debt with a balloon
- Business credit card debt – as long as you can show it was used for business purposes
- Revolving lines of credit
Alternatives to SBA Financing
Even if you meet SBA approval guidelines, there is still no guarantee that you will find financing in the current credit environment. Banks and lenders are still extremely risk averse and the reality is that many good loans are not being approved. There is an alternative however..."Asset Based Loans."
Asset Based Loans are an alternative to SBA lending where a lender secures the loan with an asset - anything from purchase orders, to accounts receivable to equipment or inventory and some programs are available for A through D credit.
If we are unable to help you with SBA financing one of these alternatives may be possible:
- Accounts Receivable Financing
- Factoring
- Equipment Financing and Leasing
- Purchase Order Financing
- Financial Contract Monetization
- Service Contract Monetization
- Medical Equipment Financing
- Merchant Credit Card Advance Lending
- Sale/Leasebacks
- Construction Project Financing
- Tenant Improvement Financing
Please remember that in most cases we do not charge a fee for a helping you with either an SBA 7a loan or an Asset Based Loan. Please contact us if you have any questions about how to qualify for either.
You can call us toll free at 1-800-414-5285
