The Most Popular SBA Loan and Why Small Business Owners Should Know About It
If you’re a small business owner looking for financing, there’s one SBA program you’ll probably hear about early in the conversation: the SBA 7(a) loan program.
There’s a reason. The U.S. Small Business Administration describes 7(a) as its primary business loan program, and its flexibility makes it useful for a wide variety of business needs.
What is an SBA 7(a) loan?
An SBA 7(a) loan is not a loan made directly by the SBA. Instead, businesses apply through participating lenders, and the SBA provides a guaranty on a portion of the loan, helping lenders provide financing to eligible small businesses.
Most 7(a) loans can be made for up to $5 million, subject to eligibility, underwriting and program requirements.
What can an SBA 7(a) loan be used for?
One reason 7(a) financing is so versatile is the range of eligible uses. Depending on the transaction, proceeds may be used for:
- Purchasing or expanding a business
- Short- or long-term working capital
- Buying machinery or equipment
- Purchasing furniture, fixtures and supplies
- Acquiring, refinancing or improving real estate
- Refinancing certain existing business debt
- Complete or partial changes of business ownership
- Combining multiple eligible business purposes into one loan
Is an SBA 7(a) loan right for my small business?
That depends on your business, financial position, creditworthiness, ability to repay and what you’re trying to accomplish. SBA eligibility requirements also apply, so not every business or transaction will qualify.
At All Capital Bank, we believe the financing conversation should begin with understanding the business, not simply choosing a loan product.
Whether you’re preparing to expand, purchase equipment, acquire another business or make your next big move, talking with a local banker early can help you understand the financing options available.
For Tulsa-area business owners, the SBA 7(a) may be one of those options worth knowing.
Your next business move starts with a conversation.
