Everything You Need to Know About the SBA 7(a) Loan
The most popular lending program available from the Small Business Administration (SBA) is the SBA 7(a) program, and it has great appeal to small businesses, either for getting started up or when attempting to grow business. Compared to traditional loans, it is often easier for small businesses to obtain these types of loans. Although the SBA does not actually offer these loans, it is a great advocate and supporter of small businesses.
Eligibility for SBA 7(a)
The number one requirement for eligibility is to have a sound business purpose and plan in mind for any funds you would obtain through an SBA 7(a) loan. Formal eligibility requirements are that your business must meet size standards and be considered a small business within your specific industry, you must operate for profit, have equity to invest, do business in the U.S., and you must have applied for loans from other sources first.
How Funds Can Be Used
Some of the ways which an SBA 7(a) loan can be used are to purchase equipment, purchase new land, carry out new construction, acquire an existing business, refinance debt, or to purchase machinery, furniture, and other supplies. This is one area where greater flexibility is allowed, because these are all functions necessary to the growth and stability of a small business.
Benefits of a SBA 7(a) Loan
A loan through the SBA 7(a) program provides longer terms and lower down payments, relative to other sources of loans. There is also greater flexibility in terms of approving your loan, compared to the stricter requirements you might find through a conventional lender like a bank.
Repayment Terms of a SBA 7(a) Loan
This kind of loan is generally set up with monthly payments of principal and interest, and in the case of fixed-rate loans, the payments are always the same. If a variable-rate loan has been set up, the monthly payments can change every time that the prevailing interest rate does.
Apply for a SBA 7(a) Loan
To apply for a SBA 7(a) loan please contact our lending professionals at Davis Commercial Finance. At your convenience you can call or email us at: 916-412-5577 or