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The SBA 7(a) Loan Program is what most business owners envision when they think of an SBA loan. This type of loan is used by individuals looking to acquire or open a small business or to finance their existing business.
The SBA has designated the following as acceptable uses for the proceeds of its 7(a) guaranteed loans:
Purchase of existing land or buildings.
Construction of new facilities or expand current facilities.
Acquisition of equipment, machinery, furniture, supplies, materials or fixtures.
Acquisition of an existing company.
Refinancing or consolidating business debt.
As long term working capital or to purchase inventory.
As short term working capital.
Do I need a business plan?
Business plans are critical for startup businesses. The U.S. Small Business Administration program encourages a business plan as part of the application process, and we can assist you in writing one.
How long for disbursement?
Depending on the complexity of the loan, the time frame from application submission to disbursement of funds takes approximately 30-60 days.
How long will it take to get my loan approved?
Once you have submitted a complete loan package, an approval can usually be obtained in seven to ten business days
Can SBA 7(a) loan proceeds be used for salaries, operating expenses, and working capital?
Yes. Proceeds can be used to fund these items.
Is financing available to startups?
Yes. The U.S. Small Business Administration’s less stringent requirements for owners’ equity and collateral and the longer terms at better interest rates make the SBA 7(a) program an excellent option
What fees are involved?
The U.S. Small Business Administration charges a one-time guarantee fee that ranges from 2 to 3.75 percent of the guaranteed loan amount. These fees can be incorporated into your loan proceeds
What can the loan money be used for, and for how long?
Whether you already own a business or you’re starting, expanding or purchasing one, you can use the funds:
To provide working capital—term up to 10 years.
To purchase equipment or inventory, refinance or acquire a business, or for leasehold improvements—term up to 10 years.
To purchase real estate—term up to 25 years.
How does the program work?
The U.S. Small Business Administration guarantees a percentage of the loan, rather than actually providing the money. With the U.S. Small Business Administration’s guarantee, lenders grant loans they may not otherwise consider. Our affiliate provides you with the capital and, as your lender, our affiliate processes and services your loan, answer your questions and maintain a relationship with you over the term of the loan.