FAQ’s – Small Business Administration “SBA” Loans

What’s an SBA Loan?

This is a traditional bank loan that has backing from the Small Business Administration. SBA loans are one of the most common methods of funding a business in the United States. Every year, the SBA gives out billions of dollars’ worth of loans. There are four primary categories SBA loans can fall into: CDC/504 loan programs, 7(a) programs, disaster loans, and microloans.

Tell me about 7(a) programs.

7(a) programs are the most common kind of SBA loan, and it’s also known for being the most flexible small business loan out there. You can use these funds for a wide variety of different costs, including working capital, equipment, purchasing land and buildings, and even debt refinancing. Terms typically max out at 10 years for working capital needs, but can be extended for as much as 25 years for fixed assets.

Tell me about the CDC/504 loan programs.

This program is geared towards business owners who are looking to finance major fixed assets such as real estate. These kinds of loans will have you put down only 10 percent of the full costs. SBA will cover 40% of the remaining costs, and the bank lender will put forward the last 50%. Under the current regulations, these loans can’t be used for inventory or working capital. Businesses that have a net worth of less than $15 million and an average net income under $5 million can qualify. You can get up to $5 million through a 504 program.

What are microloans?

The SBA microloan program is specifically designed to give small business smaller loans that can help them begin their business. These loans, much like the 7(a) loans, can be used for working capital, equipment, furniture, and other similar expenses. These loans are doled out by intermediaries selected by the SBA. Loans up to $50,000 can be gotten through the microloan program. These loans are not available for debt refinancing or real estate.

What are disaster loans?

Disaster loans are loans that are meant for businesses that have been hurt by an affected disaster. These are very low interest loans that are meant solely for repairs.

How can you help me get an SBA loan?

SBA loans are notoriously competitive, and the problem that most business owners face is that they don’t know what lenders want to see from potential borrowers. We not only help with the extensive paperwork involved in the SBA loan process, but we also make sure that your business gives lenders the very best impression possible. As a result, you get better approval rates, lower interest rates, and a better chance at the full amount of money you want to borrow.

What are the qualifications my company needs to have?

In order to get an SBA loan, you typically will need an annual company income of $50,000 to $5 million. You also will need to have up to 40 employees, with one employee being the bare minimum. In order to qualify, you also will have to have been in business for at least 2 years. Lastly, you should be able to prove that you can make the monthly payments on the loan you want.

Are there any qualifiers that I as a business owner need to have?

Yes. You need to be a US citizen or permanent resident over the age of 21. You also need to have a clean criminal record, an excellent credit score, and you have to be current on government related loans.

Are there any industries that aren’t allowed to have SBA loans?

Almost all industries can qualify, however, there are exceptions. Political businesses, religious groups, life insurance, oil wildcatting, mining, real estate, mortgage servicing, private clubs, lending, gambling, and bail bonds are not eligible for SBA lending. If you are worried that you might not be in the right industry, ask us to find out.

What happens if I can’t qualify for an SBA loan?

Never fear, The Credit Express is here! We have plenty of different loan offers you can peruse.

Can I still get an SBA loan if I’ve been turned down before?

We love to help people get a second shot at the money they need. We might be just the team to talk to if you’ve been turned down before.

Can I have multiple SBA loans?

Sure, as long as you can stay current.

How much will this loan cost?

Interests can vary from 6% to around 10%, and the interest rates depend on the loan amount. For loans over $151,000, you may also have to pay a 2.75% guarantee fee.  We charge a 2% referral fee and a 2% packaging fee, as well. (Our fees are one-time.) Closing costs may also apply.

Are the fees taken out from the loan proceeds?


Do I need to provide a guarantee or collateral?

If you own more than 1/5 of the company, you will have to provide a guarantee. Collateral, however, depends on the kind of loan you want, as well as the amount of money you want to get.

What about insurance and landlord subordination?

For loans over $26,000, we do require insurance and landlord subordination. The lender has to be named as a Lender’s Loss Payable on your insurance policies.

Do you have a business valuation done?

If you are getting a business with an SBA loan, we will perform a valuation.

How long does the process take?

Once we have helped you fill out your application and gather documents, we will put you in touch with a notary. The entire process usually will only take about 2 to 6 weeks from application to funding. Funds are available within 7 to 10 days of application completion.

Do I need an attorney’s assistance?

It’s never harmful to speak with an attorney regarding personal and business matters, and often times, it may be the best thing you can do if you think that an attorney’s advice can help you. Although we aren’t a law firm and we cannot provide anyone with any legal advice, you are more than welcome to speak with an attorney that we use for our company. We truly want to get familiar with our clients, and help them in any way we can. Simply send an email to info@thecreditexpress.org and we’ll be sure to forward it.

Still need help?  If you have a question that isn’t answered here, or if you feel like you could use advice when it comes to the best route of financing for your business, we are here to help you make the best choice for your company!  You may call us at (678) 983-4555 or email: info@thecreditexpress.org.  You’re also more than welcome to visit our office.  Evening and weekend appointments are available.