Small Business Administration Guaranteed Loans
A Small Business Administration (SBA) loan is a good alternative for businesses whose financial needs may not fit traditional lending criteria. SBA loans offer a variety of terms and conditions and carry a Federal government guarantee of a major portion of each loan. Rates are competitive with current market rates. Please visit the SBA website for the most recent information on available programs.
7(A) Loan Guarantee Program:
- Provides loan to small businesses unable to secure financing on reasonable terms through normal lending channels.
- Guarantees a maximum amount up to $1,500,000 with an 85% guarantee on loans of $150,000 and less and up to 75% on those greater than $150,000
- Proceeds can be used for the purchase of real estate to house the business operations; construction, renovation or leasehold improvements; acquisition of furniture, fixtures, machinery and equipment; purchase of inventory; and working capital.
- Depending on the size and term of the loan, fixed rate interest rates are tied to the Prime Rate not to exceed Prime plus 2.25 percent to 4.75 percent.
- Terms are usually 7 years for working capital and up to 25 years for real estate and equipment.
- Fees vary from 2% to 3.75% depending on the loan size.
Low Doc Loans:
- Less paperwork, fast turnaround for small businesses seeking a loan amount less than $150,000.
- Terms, interest rates, and uses are the same as for any 7(A) loan
Certified Development Company (504) Fixed Asset Loans:
The 504 Program gives small business owners access to the same low-cost, fixed-rate, long-term financing that large businesses have through the bond markets.- The SBA backed portion of the loan cannot exceed 40% or $1,500,000.
- CDC backed portion of the loan cannot exceed 50%
- Borrower to provide 10% of capital
- Proceeds may be used for any of these fixed-assets projects:
- Purchasing land and existing buildings, and making improvements, such as grading, utilities, parking lots and landscaping
- Constructing, modernizing renovating or converting existing facilities
- Purchasing machinery and equipment that have a useful life of ten or more years
- Interest rates are based on the current rate for five and ten-year U.S. Treasury issues, plus an amount slightly above the Treasury rate with maturities up to 20 years
For more information, contact one of our Commercial Lenders at (402) 330-0200, Monday through Friday 8AM-5PM Central Time, or contact us, so we can discuss your commercial lending needs.
