SBA Loans

What an SBA Loan Is

SBA Loans are part of a program created by the U.S. Small Business Administration (SBA) in order to help fund entrepreneurs like you. However, the difference between an SBA and other loans is that it’s a guarantee from banks and certified lenders. This means the SBA doesn’t actually give you money. But rather, they determine guidelines for lenders and guarantee applicants up to 85% of the loan. This way, the lenders remain protected from potential defaults and it allows for them to provide funding for entrepreneurs with very little risk.

Loan Amounts

$250,000 – $5,000,000

Loan Terms

10 – 25 Years

Interest Rates

6% – 8%


14 – 60 Days

Types Of SBA Loans And Which Ones Are Best For You

For entrepreneurs like you, there are a few types of SBA Loans. The main two are the 7(a) Loan Program and the CDC/504 Loan Program. To help you out, we’ll explain what each of them does.

7(a) Loan Program:

The 7(a) Loan Program is pretty flexible for your entrepreneurial needs. However, the primary uses include: refinancing existing debt, revolving funds, equipment purchases, working capital, and the purchase of land. You can receive upwards of $5 million in guaranteed financing and applications are processed through banks, certified lenders, and credit unions.

CDC/504 Loan Program:

The CDC/504 Loan Program is primarily used by Entrepreneurs like you for project funding. When your loan is approved, you’ll receive 50% of the money from the bank and 40% of it from a Certified Development Corporation (CDC). In this instance, project funding means fixed assets, and some fixed assets include: buying equipment, buildings, land, building/renovating new/existing facilities, landscaping, and debt refinancing due to renovations/improvements. You can receive upwards of $5 million in finances and applications are processed through non-profits and private-sector lenders.

Who Qualifies For An SBA Loan: The Three Cs

Small and new businesses can qualify for an SBA loan. However, SBA loans depend greatly on your credit score. Business owners with great scores and a good borrowing history are the most likely candidates to get qualified.

When you’re looking into loans, Finance Factory looks at the Three Cs: Credit, Cashflow, and Collateral. You’ll want to have a credit score between 680 and 800– with an ideal score of 680+. But we’ll also look for a minimum account balance of $1,000 – $5,000 for monthly cash flow (but also look at tax returns, profit, and annual revenue). As for collateral, we prioritize unsecured funding; however, collateral is just one option. As long as you have one of the Three Cs, you’ll qualify for a loan.

It’s important to understand that businesses younger than 2 years or guarantors with poor credit scores will have a harder time qualifying. SBA lenders need to know you’re reliable and not a risk.

Ideal Annual Revenue

Ideal Credit Score


Time In Business

2 Years

How SBA Loans Work

When it comes to SBA Loans, most small business owners want to know what they can do in order to qualify. They are one of the best loans out in terms of rates and costs; however, they are aren’t the easiest loans to qualify for.

Here at Finance Factory, we’ve helped many small business owners successfully apply and qualify for SBA loans. We have an incredible amount of experience with a passionate team specialized in guiding you during the application process.

We understand the ins-and-outs of SBA loans and exactly what it takes for you to qualify. We’ll also help find the best product for you.

SBA Loan Fundamentals

“SBA” stands for the Small Business Administration. The Small Business Administration is a Government Program and Agency designed to assist entrepreneurs grow their businesses by granting access to the finances they need.

However, a common misconception when it comes to SBA loans is that the Small Business Administration is the lender. In actuality, the SBA provides borrowers with a guarantee of a bank loan. By doing so, the SBA uses government money to guarantee a percentage (up to 85%) of the loans by banks. This gives the banks a greater incentive to lend their money out to small business owners since there is less of a risk.

How To Apply / Documents Needed

Most banks, both local and large, offer small business owners SBA loans. However, certified alternative financial institutions also can help you get an SBA. The process itself is relatively long and there’s quite a bit of information needed in order to be processed and approved.

Required Documents

Business Plan

Business Debt Schedule

Business Tax Returns

Business Cash Flow

Personal Tax Returns

Personal Credit history

Driver’s License

Voided business Check

Bank Statements

Balance Sheet

Industry Code

State / Location Of Business / Officers