SBA 7(a) Term Loan
The SBA 7(a) loan program was established to give borrowers more flexible options for a variety of business needs. The U.S. Small Business Administration guarantees a percentage of the loan for the lender, and as a result, banks can give preferable terms. It’s important to understand that SBA only provides a guaranty; each loan is funded and serviced by Discovery Bank, and your relationship will always exist with Discovery Bank as long as the loan is in place.
The most popular uses of the SBA 7(a) program include:
Real Estate
- Up to 90% financing for owner-users
- Purchase, construction, refinance
- General purpose or special-purpose properties (gas stations, car washes, etc.)
- Minimal prepayment penalties for the first 3 years
- Terms typically 25 years fully amortized, and fees and loan costs can be financed
Equipment:
- Up to 100% financing
- 10-year fully amortized financing
Business Acquisition
- Up to 80% financing
- 10- year fully amortized financing
Working Capital
- Up to 100% financing
- 7 years fully amortized financing
Maximum Amount |
$2,000,000 |
Term |
7 - 25 years |
Collateral |
Secured by all business assets and all available personal collateral as defined in the SBA SOP 50-10(4) |
Advance Rate |
Up to 100% financing for eligible purposes except real estate, which requires a minimum of 10% injection from borrower |
Rates |
Variable; generally based on the Wall Street Journal Prime Rate plus a Bank determined spread |
Guarantee |
Loans to privately held corporations require the personal guarantee of all principals holding 20% or greater ownership interest |