The U.S. Small Business Administration (SBA) plays a key role in helping small businesses get the funding that they need to grow. To secure all of the benefits that these loans have to offer, entrepreneurs must work with a funding partner to fulfill the loan terms. Understanding the specifics of SBA 7(A) and Express loans can help you determine the best path forward for your small business.
SBA 7(A) Loans
SBA 7(A) Loans are the most common type of loan that the SBA offers. They can be applied for to cover a wide variety of different business needs and expenses, including inventory, business acquisitions, working capital and business equipment. There are several terms attached to SBA 7(A) Loans, and applicants must meet several criteria to qualify:
- Credit score of 685 or higher
- Business plan required
- Minimum cash reserves of 10 percent
- Collateral typically required
- Cash injection between 10 and 30 percent
These loans usually have a 10-year term and do not have balloon costs. You can use 401(k) ROBS funding with SBA 7(A) Loans to meet the minimum cash injection requirement.
Tenet Financial offers small businesses the opportunity to secure funding through SBA 7(A) Loans. Our team can package SBA 7(A) Loans of up to $5 million, depending on the specific needs of the business.
SBA Express Loans
SBA Express Loans are specifically designed to fund working capital for small business owners. These loans of up to $150,000 are approved within three business days, giving borrowers the convenience of a streamlined lending process. Like SBA 7(A) Loans, SBA Express Loans have a 10-year term and require a credit score of 685 or higher, but some of the other specific requirements vary:
- Must not have more than two bank inquiries
- No judgments or liens
- No bankruptcies for at least three years
- Documented 10 percent equity injection required for businesses less than two years old
- Broker fee
These loans have a variable interest rate of up to 4.75 percent. The interest rate varies quarterly and the loan is secured with UCC-1 on business assets. These loans are a good option for small businesses that are looking for a quick financing option and only require a low dollar amount.
Getting funded
Whether you are interested in acquiring funding through an SBA Express Loan or an SBA 7(A) Loan, it’s important to partner with an expert who can walk you through the process and enable you to get funded. Tenet Financial is proud to serve small businesses that want to apply for loans through the SBA. We have an in-house loans specialist who can package loans directly for our clients, without any assistance from third parties.
We can assist you with every aspect of your loan application and provide you with the information that you need to get financed. When you work with us, you can expect rapid turnaround, clear communication and personalized service to meet your individual business needs. Get in touch with us today to arrange a consultation.