SBA Loans | How to Qualify & Find the Right Small Business Loan
SBA Loans | How to Qualify & Find the Right Small Business Loan
If you’re a small business owner looking to grow your business, buy an existing business, or secure startup funding, an SBA loan can be a powerful financing solution. Backed by the U.S. Small Business Administration (SBA), these loans offer competitive interest rates, longer repayment terms, and flexible funding options for businesses at all stages.
At Emprise Bank, we are committed to helping small businesses succeed. Our SBA loan advisors can guide you through the process, ensuring you find the best loan for your needs. To prepare you for that initial conversation, here are a few basics on qualifying for an SBA loan and selecting the right option for your business.
How Do You Qualify for an SBA loan?
The SBA does not lend money directly to small businesses, but instead guarantees loans made by approved lenders, reducing their risk and making financing more accessible. To qualify, businesses must meet specific requirements. Below are three main SBA loan requirements:
- Meet the SBA’s Definition of a Small Business
- While each SBA loan program has its own terms and conditions, they share common rules about size requirements. “Small” is based on either the number of employees or revenue and is specific to the industry. You can find the size standards to qualify for an SBA loan from the Code of Federal Regulations.
- Operate in the U.S.
- Your business must be for-profit, located in the United States or its territories, and operate primarily in an eligible industry.
- Own a Qualifying Business.
- Businesses in many industries may be eligible to apply for an SBA loan, including construction, manufacturing, agriculture and food production, professional services, health care, wholesale and retail, and hospitality. Some industries are ineligible for SBA loans, including:
- Gambling enterprises
- Political or lobbying organizations
- Life insurance companies
- Investment real estate
- Businesses in many industries may be eligible to apply for an SBA loan, including construction, manufacturing, agriculture and food production, professional services, health care, wholesale and retail, and hospitality. Some industries are ineligible for SBA loans, including:
Talk to one of our SBA loan advisors if you have questions about eligibility.
What Documents Are Needed to Apply for an SBA Loan?
If you’re applying for an SBA loan for an existing business, your lender will need to see your financial performance reports for the previous three years. For a new business, you’ll need a business plan outlining financial projections. All applicants will need to provide information about any collateral available and a plan for the SBA loan funds.
What Can an SBA Loan Be Used For?
Funds from an SBA loan can be used to achieve a number of goals:
- Acquiring an existing business
- Buying or renovating commercial real estate
- Refinancing business debt
- Working capital for day-to-day operations
- Purchasing equipment, machinery, furniture, or fixtures
Your lender can help match you with the most appropriate SBA loan option.
Which SBA Loan is Right for Your Business?
A quick overview of SBA loan programs is listed below. Our SBA loan advisors can help you determine the type of loan that meets your company’s needs.
SBA 7(a) Loan – Flexible Financing
The most popular SBA loan, 7(a) loans can be used for:
- Expanding operations
- Acquisitions
- Working capital
- Refinancing existing business debt
- Purchasing equipment, real estate, or an existing business
SBA Express Loan – Fast Funding When You Need It
For businesses needing a quick turnaround, Express Loans can provide up to $500,000 in funding with a quick approval.
SBA 504 Loan Program – Long-Term, Fixed-Rate Financing
Best for businesses looking to purchase commercial real estate or major fixed assets with low-interest, long-term financing.
- Banks partner with a Certified Development Company to fund the loan at competitive fixed rates.
Frequently Asked Questions About SBA Loans
What is the minimum credit score for an SBA loan?
While the SBA doesn’t have a minimum credit score to apply for an SBA loan, you’ll want to demonstrate a positive credit history in your SBA loan application. Factors such as cash flow, assets, and business plan may all be considered with your application.
How long does it take to close an SBA loan?
The time needed to close an SBA loan can vary. Usually, Emprise Bank can close an SBA loan in the same timeframe as other types of loans:
- SBA Express Loans: 30 days or less
- SBA 7(a) Loans: 30 to 60 days
- SBA 504 Loans: 30 days
The SBA granted Emprise Bank Preferred Lender status due to our expertise with the SBA lending process and ability to successfully process and serve SBA loans. The Small Business Administration gives preferred lenders the ability to make final credit decisions, which significantly reduces the amount of time the application process takes.
Find the Right SBA Loan for Your Business
Whether you’re looking for short or long-term financing, funds for working capital, inventory, commercial real estate or more, an SBA loan may help provide the funds needed to help you purchase, manage or expand your business.
At Emprise Bank, our SBA loan advisors can help you explore your options, guide you through the application process, and ensure you secure the right financing for your needs.
Get started today! Contact Emprise Bank for a free consultation and take the next step toward growing your business.