Understanding SBA Loans

As a certified consultant with the SBDC, I see hundreds of businesses each year coming in looking for a loan. Some of these businesses have already been declined by a lender and don’t understand why. In today’s markets lenders are very conservative and SBA loans are a great option for those businesses. There are several different types of SBA loans but the two most common types are the 7A Loan Program and the 504 Loan Program.


Under the flagship 7a Loan Program it is used for both start- up companies and existing companies for general business purposes and can include working capital, furniture and fixtures, equipment, and even buildings. The term can be as much as 25 years. This loan is available through participating lenders.

The 504 Loan Program is more specific and provides long term low interest rate funds for buildings and equipment. Under this program a certified development company works with a lender, down payments can be as low as 10% with the SBA financing as much as 40% and a lender financing 50%. These loans cannot be used for working capital. 

Want to learn more about SBA loans?  The SBDC can help with that, or contact the SBA at www.sba.gov. Watch for my next post on what you need to apply.

Marge Cirillohas entrepreneurial experience that includes owning and operating three highly successful restaurants and catering service for eight years. After selling the restaurants she went to work for the SBA Disaster Team as a loan specialist. She has also worked for Certified Development Companies as an underwriter and marketer of the SBA 504 Loan program. Before joining the SBDC Marge was an Assistant Vice President at a community bank specializing in SBA lending. She now serves as the SBDC liaison in St. Johns County.
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