Frequently Asked Questions
Welcome to our SBA Loan FAQ page! Here, we’ve compiled answers to the most common questions about SBA loans. If you need further assistance, don’t hesitate to reach out.
1. What is an SBA loan?
An SBA loan is a government-backed loan designed to help small businesses access affordable financing. The Small Business Administration (SBA) guarantees a portion of the loan, reducing the risk for lenders and making it easier for small businesses to secure funding.
2. Who qualifies for an SBA loan?
To qualify for an SBA loan, your business must meet certain criteria, including:
- Operates as a for-profit business
- Meets size standards set by the SBA (usually fewer than 500 employees)
- Has a sound business plan
- Demonstrates the ability to repay the loan
- Provides collateral (for some loan types)
We offer assistance in determining your eligibility based on your unique business situation.
3. What types of SBA loans are available?
The SBA offers several loan programs to meet the diverse needs of small businesses. The most common types include:
- 7(a) Loans: Used for general business purposes like working capital, equipment, and expansion.
- CDC/504 Loans: Designed for businesses purchasing real estate or equipment.
- Microloans: Small loans up to $50,000 for startup businesses or those in need of working capital.
- Disaster Loans: Low-interest loans to help businesses recover from natural disasters.
For a more detailed overview, visit our SBA Loan Programs page.
4. How do I apply for an SBA loan?
To apply for an SBA loan, follow these steps:
- Gather Documentation: Prepare financial statements, a business plan, tax returns, and other necessary documents.
- Complete the Application: Fill out the loan application form on our website or with one of our specialists.
- Review & Approval: After submission, we’ll review your application and guide you through the approval process.
- Receive Your Funds: Once approved, you’ll receive your SBA loan funds to use for your business needs.
Our team is here to help you through each step.
5. What are the interest rates for SBA loans?
Interest rates for SBA loans vary based on the loan type, amount, and term length. Typically, the rates are lower than conventional loans because of the SBA’s government backing. Rates are determined by the SBA and can be either fixed or variable.
Please contact us for specific rate information based on your loan application.
6. How long does it take to get an SBA loan?
The SBA loan approval process can take anywhere from a few weeks to a few months, depending on the type of loan, the complexity of your business, and how quickly you submit the required documentation.
We strive to streamline the process and keep you informed every step of the way.
7. How much can I borrow with an SBA loan?
The amount you can borrow depends on the type of SBA loan:
- 7(a) Loans: Up to $5 million
- CDC/504 Loans: Up to $5.5 million for standard loans, higher amounts may be available for certain energy projects
- Microloans: Up to $50,000
- Express Loan: Up to $500k
The actual amount you qualify for will depend on your business’s financials, creditworthiness, and needs.
8. Can I use an SBA loan for personal expenses?
No, SBA loans are intended for business purposes only. Personal expenses, like purchasing a home or paying personal debts, are not eligible uses for SBA loan funds.
For more details on acceptable uses of SBA loan funds, visit our Loan Usage page.
9. What happens if I can’t repay my SBA loan?
If you’re unable to repay your SBA loan, it’s crucial to contact your lender as soon as possible. The lender may offer restructuring options or work with you to avoid default. However, failure to repay an SBA loan could result in serious consequences, including the loss of collateral and potential legal actions.
We recommend discussing any concerns early to find a solution.
10. Are SBA loans available to startups?
Yes, SBA loans are available to startups, although it may be more difficult to qualify. Startups typically need to demonstrate strong business plans, personal assets, or experience in the industry. Microloans are often a good option for small businesses just starting out.
11. Can I use an SBA loan for refinancing my existing debt?
Yes, SBA 7(a) loans can sometimes be used for debt refinancing, particularly if the existing debt is causing cash flow problems. This option is available under specific conditions, so please contact us for more information.
12. Are there any fees associated with SBA loans?
Yes, SBA loans may have fees, including:
- Guaranty fees: Based on the loan amount and term length.
- Closing costs: Standard loan-related expenses such as processing, documentation, and credit checks. These fees vary depending on the loan type and amount, but we’ll provide a breakdown before you proceed with your loan application.
Top 3 Frequently Asked Questions for SBA Lenders
These FAQs address the most common concerns that potential borrowers may have when approaching SBA lenders.