Innovative Business Loans For Your Business Venture

The standard SBA 7(a) loan has a maximum loan amount of $5,000,000.  Typically, the bank will lend up to 90% of the total project costs. The loans are fully amortized with no balloons.  And there is no prepayment penalties for loans less than 15 years.  Real estate loans can have amortizations up to 25 years and non-real estate loans can have amortizations up to 10 years. This makes the SBA 7 (a) loan a very popular choice for Start-up Businesses and Business Acquisitions.

It can be used for the following:

• Long or short-term working capital;
• Revolving loans based on the value of existing inventory and receivables;
• Purchase equipment, machinery, furniture, fixtures, inventory, supplies, and materials;
• Purchase real estate, including land and buildings (some lenders will go as high as 100% financing on owner occupied commercial real estate, let us help you get in touch with the right lenders!);
• Construction of a new building or renovation of an existing building;
• Establishing a new business or the acquisition, operation, or expansion of an existing business;
• Refinancing existing business debt, under certain conditions.

SBA 504 loans are a little different than SBA 7(a) loans.  With a 504 you not only deal with the bank but you will also be dealing a Certified Development Company (CDC).  During the 504 loan process, both the bank and the CDC will underwriter your loan request.  A typical 504 loan may have a structure of at least a 10% equity injection from the borrower, up to 40% of funds from the CDC, and up to 50% of the funds from the bank.  Allowing the borrower to finance up to 90% of the project costs.  The normal limit on the CDC portion is $5,000,000 allowing the borrower to use the 504 to finance a project up to $12,500,000 with just a 10% equity injection.  Making this a great financing option for hotel transactions above $5,000,000.

• Interest rates are fixed for the amortization of the loan;
• Interest rates are typically lower than the SBA 7(a) loan product;
• Fees are capped;
• Amortizations of up to 25 years for real estate;
• Amortizations of up to 10 years for Equipment and Machinery.

"It's almost always harder to raise captial than you thought it would be and it always takes longer. So plan for that."