Starting and growing a business is challenging. You need capital to cover commercial property, equipment, and materials. Not to mention that you have to be able to pay employees to help you get your business off the ground; even if you've secured funding for your business needs, unexpected economic events can leave you short of cash.
If you need funds to start, grow, or operate your business, an SBA loan might be the answer. Several loans backed by the Small Business Association are designed for various uses. Here, we explain SBA loans and explore the different SBA loans available to small business owners.
SBA loans are business loans backed by the Small Business Association that can help cover real estate purchases, startup costs, working capital, and more. Since the SBA oversees these loans, the qualifications and repayment terms may differ from typical business loans. As a result, they may be a more attractive option for new businesses.
The SBA works with designated lenders nationwide to provide financing to small businesses. To apply for a business loan that meets your needs, visit a local lender and fill out an application. Your business must meet SBA size standards, which require you to be under a specific annual revenue (based on your industry) to qualify.
PrimeWay Federal Credit Union in Houston is a qualified SBA lender. We offer various SBA loan options designed to meet the specific needs of small businesses in the area. Each type of SBA loan has specific terms and conditions. To determine which loan is right for your Houston business, consider each loan type's eligibility requirements and purpose.
With various use cases and flexible eligibility, the SBA 7(a) is the SBA's most common loan option. It is designed to help businesses finance startup costs, including real estate, equipment, inventory, and working capital.
To be eligible for an SBA 7(a) loan, you must meet these requirements:
An SBA 7(a) loan provides businesses a maximum loan of $5 million with repayment terms of up to 25 years. Common use cases include real estate, working capital, expansion, equipment, and construction or renovation.
Typically used for large purchases, SBA 504 loans are designed for major fixed assets that promote business job growth and job creation.
To be eligible for an SBA 504 loan, you must meet these requirements:
An SBA 504 loan provides businesses a maximum of $5.5 million with repayment terms of up to 25 years. Use cases for SBA 504 loans are restricted to investments that meet job creation and retention or other public policy goals. Typical uses include real estate purchases, construction, renovation, and equipment.