Club Insider

Business Finance Depot Video Series

Different Types of SBA Loans

  • For this article, Log In to:
  • View eVersion View eVersion | Download PDF Download PDF

Paul BosleyPaul Bosley

In this article and accompanying video, we outline the three different types of SBA loans available to startup and existing companies. It is the most common loan type because the SBA backs a significant amount of the loan, which reduces the risk of the lender.

The main types of SBA loans and their key characteristics are as follows:

SBA Express Loans (part of the Small Loan Advantage 2 program):

  • Collateral: Business collateral only;
  • Loan amount: Capped at $350K;
  • Down Payment: 10% minimum;
  • Repayment Term: 10 years;
  • Comments: One lender specializes in a $150K working capital loan that closes quickly!

SBA 7(a) Loans:

  • Collateral: Business and personal assets up to the loan amount;
  • Loan Amount: Up to $5MM;
  • Down Payment: Typically 20% - 30%;
  • Repayment Term: 10 years;
  • Comments: Loan can be used for renting a location or purchasing real estate, equipment, buildout and working capital.

SBA 504 Loans:

  • Collateral: Real Estate being purchased;
  • Loan Amount: Up to $10MM;
  • Down Payment: Typically 10%;
  • Repayment Term: 25 years;
  • Comments: Loan can be used for purchasing after renting a location, construction and equipment only. Location must be 51% owner occupied, so the other 49% can be rented to a tenant.

• • •

There are many benefits of using the SBA 7(a) program to finance your business. There is only one monthly debt payment, which is amortized over the longest repayment term available with no significant prepayment penalty. The use of funds is nearly unlimited to any legitimate business purpose. Since all SBA loans are backed by the Federal government, it offers the lowest APR available. Consequently, we recommend you strongly consider this form of financing for the wide variety of uses that this flexible loan product offers for business financing.

For more information, contact Paul Bosley at (800) 788 - 3884 or or visit

Back to Edition

Fabiano Designs