The Basics of SBA 7(a) Loans
They say you have to spend money to make money – but what if you don’t have the money to spend in the first place? It’s no secret that starting, growing, or acquiring a new business is expensive, and it’s important to make smart choices about where you source your funding and how you use it. If you feel like you’ve run out of options to fund your small business, think again. An SBA 7(a) loan may be your answer.
What is an SBA 7(a) loan?
The 7(a) general small business loans program is the Small Business Administration‘s (SBA) most common loan program. Its purpose is to provide financial help for small businesses seeking to start a new business or to acquire, operate, or expand an existing business that are unable to secure conventional financing. An SBA 7(a) loan can provide funds for commercial real estate, community facilities, residential mortgages, business acquisition, equipment, working capital, debt financing, or other needs specific to a small business.
An SBA 7(a) loan isn’t a one-size-fits-all solution. In fact, there are several different types of the loan that can provide funding catered to your needs, including the Standard 7(a), 7(a) Small Loan, SBA Express, Export Express, Export Working Capital, and International Trade loans. Loans are granted exclusively to businesses and never to individuals, and loans must be approved by the SBA or by a delegated authority. Loans up to $5 million come with a repayment period of 7 to 25 years, and fees, interest rates (capped off at a certain amount by the SBA), and percentage of guarantee are negotiated between the borrower and the lender.
Why SBA financing is important?
SBA-guaranteed loans help to level the playing field; SBA-guaranteed loans generally have rates and fees that are comparable to non-guaranteed loans, offering competitive prices to businesses. With the needs of a small business in mind, SBA loans offer lower down payments, flexible overhead requirements, and flexible collateral requirements. In addition, many SBA loans provide more than just a dollar amount; some SBA loans come with advisory services and other resources to nurture the growth and stability of a business.
How does Community Reinvestment Fund, USA (CRF) do SBA 7(a) loans?
For more than 30 years, CRF has supported the growth of small businesses in the communities that need it the most. Few other lenders follow our model; in fact, CRF is one of only three authorized nonprofit small business lending companies in the U.S. Because we care about the long-term health and success of small businesses, CRF approaches lending with sustainability in mind. In addition, we keep a big-picture perspective; we get to know our clients so as to best nurture growth in their communities. We invest in clients who we are confident can impact their communities positively.
CRF is ready to work with you. Fill out an application to give us an idea of your financing needs, and we’ll contact you within two business days. Work with a loan provider who cares about your business as much as you do – contact us today!
All loans subject to credit approval.