SBA Lending: 7A and 7A Express
If an SBA loan is the ideal funding solution for you, we’ll guide you every step of the way – offering the expertise you need to take the pain and worry out of the process while helping you make the absolute right financial decision
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SBA LOAN TERMS
⇒ Loan Amounts
Up to $5,000,000
⇒ Loan Term:
⇒ Time To Fund:
1-2 months after approval
⇒ Interest rates:
HELPING YOU NAVIGATE THE COMPLEX SBA LOAN PROCESS
The U.S. Small Business Administration is often a great ally for entrepreneurs and small businesses. But did you know that the SBA may recommend that your business try to qualify for a conventional loan first before turning to the SBA and its guaranteed loan products? Many small businesses don’t realize this and understandably so. You’re busy running your operation, getting new clients and growing your business, not becoming an SBA expert.
That’s where Business Capital Consultants comes in. Not only are we experts at understanding the various types of SBA loans available for different types of small businesses, we help you determine whether an SBA loan is the best option for you. Because there are a variety of stipulations associated with obtaining an SBA loan, Business Capital Consultants work to understand your overall financial situation and whether it fits within the SBA framework. We then help you navigate the complex SBA loan application process in a way that can help speed up the decision and get your business the funding it needs fast.
While the SBA offers up to 12 different types of loan products, there are 2 types of SBA loans that work for the majority of companies we work with.
SBA Loan Programs
- The SBA’s most common loan program, the 7(a) loan offers a maximum amount of $5 million. It’s ideal for business startups as well as established businesses to meet short and long-term needs, such as working capital, equipment purchases and inventory. Business Capital Consultants has over 40 nationwide preferred lender provider banks we work with and can close fully underwritten loans in 30 days or less.
- With a maximum loan amount of $350,000 and an SBA guarantee of up to 50% of the loan, the SBA Express can be configured as a revolving line of credit or long-term loan. Express also features fast approval and turnaround, often within 36 hours. Furthermore, lenders and borrowers may negotiate the interest rate, as long as it does not exceed the SBA maximum. Business Capital Consultants can assist your business with this loan’s fast turnaround and streamlined application process.
The SBA’s 7(a) small loans are any 7(a) loans of $350,000 or less. The primary difference here is collateral. Normal 7(a) loans require lenders to take as much collateral as possible to cover the loan. For 7(a) small loans, the lender must only follow its own collateral policies and procedures for non-SBA loans of similar sizes.
If your business exports products to other countries, Export Express loans offer you a fast method to get SBA-backed funding up to $500,000 in order to support those operations. Lenders have the ultimate say in whether or not you’ll be approved for an Export Express loan. You can usually get approved for an Export Express Loan with 24-36 hours.
Export Working Capital loans are essentially larger versions of Export Express Loans, but they’re tailored to meet your working capital needs. You can borrow up to $5 million in Export Working Capital loans. Unlike Export Express Loans, the SBA must approve your Export Working Capital loan. Additionally, your export-related inventory and receivables serve as collateral for this type of loan. Lastly, owners with 20% or more of an ownership stake in the business must sign a personal guarantee.
International Trade loans are a long-term financing vehicle for businesses whose export sales are causing them to expand. They’re also designed for businesses whose operations have been hurt by imports and need to modernize to stay competitive. The SBA offers International Trade loans up to $5 million. Term lengths can be up to 10 years for permanent working capital, 10 years for machinery and equipment (up to 15 years if the useful life is longer than 10 years), and 25 years for real estate.
The SBA can designate lenders as Preferred Lenders. These lenders can approve SBA loan applications themselves, instead of sending them to the SBA like nonpreferred lenders have to — meaning faster turnaround times for you. Additionally, SBA loans from Preferred Lenders tend to have favorable interest rates, longer repayment terms, and no prepayment penalties. Business Capital Consultants can find a Preferred Lender for you so you can reap the benefits of an SBA loan without waiting too long.
Small businesses in which 51% of the owners are veterans of the US Armed Forces can take of Veterans Advantage loans. These reduce upfront guarantee fees for veteran entrepreneurs. Amounts up to $150,000 have no guarantee fees. Loans from $150,001 to $500,000 have a 1.5% guarantee fee for a maturity longer than 12 months, and a 0.125% guarantee fee for less than 12 months. After that, fees never exceed 3.75%.
CAPLines is an overarching program (consisting of 4 CAPLines) that assists businesses with short-term and cyclical working capital solutions. Seasonal CAPLines are meant to help businesses in seasonal industries, such as lawn care, finance their seasonal operations. They can either revolving or non-revolving lines of credit, and they go up to $5 million. Seasonal CAPLines must be used to finance seasonal increases in accounts receivable, inventory, or labor costs — they can’t be used to maintain working capital during the slow season.
Contract CAPLines are lines of credit that companies can use to cover their direct materials and labor costs that are associated with assignable contracts. These CAPLines can be either revolving or non-revolving, and the amount you can borrow goes up to $5 million. Businesses must have proven experience, profitability, and the ability to complete any contracts, subcontracts, or purchase orders in order to qualify for a Contract CAPLine.
Builders CAPLines are revolving or non-revolving designed for construction contractors, home builders, and similar businesses. These businesses can use their Builders CAPLine (which can be up to $5 million) to finance direct materials and labor costs associated with constructing, rehabbing, or renovating commercial or residential buildings. The Builders CAPLine is secured by the building the company is working on. Businesses must have proven experience, profitability, and ability to successfully complete projects on time.
Working CAPLines are revolving lines of credit up to $5 million set aside for businesses that can’t meet underwriting standards for most forms of long-term credit. You can use a Working CAPLines to finance recurring/short-tem needs, cyclical growth, and similar working capital needs. To repay a Working CAPLine, you convert short-term assets (such as accounts receivable or inventory) into cash, then remit that cash to your lender. Lenders may charge additional fees on your Working CAPLine.
Business Capital Consultants is here to help if you aren’t sure which short-term financing source is right for you. We’ll deal with the paperwork and phone calls for you so you can get the funding you need without wasting valuable time.