The Gold Standard in Small Business Financing
SBA loans are often called the best deal in small business lending, and for good reason. These government-backed loans offer lower interest rates, longer repayment terms, and lower down payments than conventional business loans.
Understanding SBA Loans
The Small Business Administration doesn’t lend money directly. Instead, the SBA provides a guarantee to approved lenders, reducing their risk. This guarantee allows lenders to offer better terms than they could otherwise.
SBA 7(a) Loans
The most popular SBA program, 7(a) loans offer versatile funding for almost any business purpose.
- Maximum amount: $5 million
- Terms: Up to 10 years (25 years for real estate)
- Interest rates: Prime + 2.25% to 4.75% (variable)
- Uses: Working capital, equipment, real estate, debt refinancing, business acquisition
SBA Microloans
Smaller loans for startups and smaller businesses.
- Maximum amount: $50,000 (average: $13,000)
- Terms: Up to 6 years
- Interest rates: 8-13% typical
- Uses: Working capital, inventory, supplies, equipment, fixtures
SBA 504 Loans
For major fixed asset purchases like real estate or large equipment.
- Maximum amount: $5 million (up to $5.5 million for certain projects)
- Terms: 10 or 20 years
- Down payment: As low as 10%
- Uses: Real estate purchase, major equipment, building improvements
Why Choose SBA Loans?
Lower Interest Rates
SBA loan rates are capped by the government. Current SBA 7(a) rates typically range from Prime + 2.25% to Prime + 4.75%, significantly lower than many alternative lending options.
Longer Repayment Terms
Longer terms mean lower monthly payments:
- Working capital: Up to 10 years
- Equipment: Up to 10 years (or useful life)
- Real estate: Up to 25 years
Lower Down Payments
SBA loans often require just 10% down for real estate, compared to 20-30% for conventional commercial loans.
No Balloon Payments
SBA loans are fully amortizing, meaning no large balloon payment at the end.
SBA Loan Requirements
SBA loans have more requirements than alternative financing, but the better terms make it worthwhile for qualifying businesses. Check our detailed SBA loan requirements checklist to see if you qualify.
Basic Eligibility
- For-profit business
- Operating in the U.S.
- Owner has invested equity
- Exhausted other financing options
- Not delinquent on government debt
- Business type not prohibited by SBA
Typical Requirements
- Credit score: 680+ preferred (varies by lender)
- Time in business: 2+ years preferred (startups may qualify)
- Revenue: Demonstrated cash flow to service debt
- Collateral: When available (not strictly required)
- Down payment: Typically 10-20% depending on loan type
Documentation Needed
- Personal and business tax returns (3 years)
- Business financial statements
- Business plan
- Personal financial statement
- Business debt schedule
- Accounts receivable and payable aging
- Lease agreements
- Business licenses
The SBA Loan Process
SBA loans take longer than alternative financing but follow a predictable process:
Week 1-2: Consultation and Preparation
- Discuss your needs and goals
- Determine which SBA program fits
- Begin gathering documentation
Week 2-4: Application Completion
- Compile all required documents
- Complete SBA forms
- Submit to lender
Week 4-8: Underwriting
- Lender reviews application
- May request additional information
- SBA review (if required)
Week 8-12: Approval and Closing
- Receive approval and commitment letter
- Complete closing documents
- Funds disbursed
Is an SBA Loan Right for You?
SBA loans are ideal when:
- You have time to wait (30-90 days)
- You need lower rates and longer terms
- You’re purchasing real estate or major equipment
- You want to refinance existing high-rate debt
- Your credit and business metrics are strong
For faster funding needs, our working capital loans, merchant cash advances, or equipment financing may be better options.
Get Started with SBA Loan Assistance
Navigating the SBA loan process can be complex. Our team helps Dallas businesses compile documentation, find the right lender, and move efficiently through the application process.
Contact us for a free consultation to discuss whether an SBA loan is right for your business needs.