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SBA 7(a) LOANS BROKERS

According to the small business administration, "The 7(a) Loan Program, SBA's most common loan program, includes financial help for businesses with special requirements."

SBA Loans Broker in New Jersey

What is an SBA 7(a) Loan?

The 7(a) loan program is the SBA's primary method of assisting small businesses in the U.S. When you apply for an SBA 7(a) loan, you work with a lender and the SBA participates by guaranteeing a portion of the loan amount. This guarantee from a government agency helps businesses acquire funds, even if they may not have otherwise qualified for a business loan.

Who is Eligible for an SBA 7(a) Loan?

Eligibility requirements for the 7(a) loan program are based on several key characteristics of the business and its owners. According to the SBA, eligibility is based on how the company earns its revenue, the background of its owners and where it operates. However, there are some basic requirements to be eligible for assistance.

  • Operate for profit
  • Be small, as defined by the SBA
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Have reasonable invested equity
  • Use alternative financial resources, including personal assets, before seeking financial assistance
  • Be able to demonstrate a need for the loan proceeds
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligations to the U.S. government

Eligibility Criteria for an SBA 7(a) Loan

Firstly the size of your business has to be relatively small i.e your business must have fewer than 500 employees. Your yearly revenue must have been less than $7.5 million on average for the last three years. Your net income must be under $5 million (after taxes and not counting carry-over losses), and your tangible net worth must be less than $15 million. These are the basic requirements that you need to fulfill to qualify for an SBA7(a) loan.

Types of SBA 7(a) Loans

The SBA lists different kinds of 7(a) loans on its website which are all offered by SBA loans broker in New Jersey and SBA Loans broker in New York and designed to meet different needs, so businesses in some industries may find that one 7(a) loan is better suited for them than others. The loans available are

Types of SBA 7(a) Loans

The SBA loans broker in New Jersey and SBA Loans broker in New York lists nine different kinds of 7(a) loans on its website.2 Everyone of them is designed to meet different needs. So there is something for everyone. The types of loans are

Standard 7(a)

Most small businesses will qualify for this kind of 7(a) loan. A maximum of $5 million can be borrowed. The SBA will guarantee 85% of loans up to $150,000 and 75% of loans greater than $150,000.

7(a) Small Loan

These loans lend up to $350,000, but otherwise have the same features as the Standard 7(a) loan.

SBA Express

This is suitable for businesses that require loans quickly. The SBA says it will respond to your application within 36 hours. The maximum loan is $350,000, and the SBA will only guarantee up to 50% of the loan. It can be used for a revolving line of credit for up to 7 years.

Export Express

This program is for exporters who need loans and lines of credit up to $500,000. The lines of credit last for up to seven years. The SBA will guarantee up to 90% of loans under $350,000 and 75% of loans that exceed that amount. This will also be lent within 24 hours.

Export Working Capital

This loan is for businesses that need additional working capital to support their export sales. Loans are available through the Export Assistance Center for up to $5 million. The SBA can guarantee up to 90% of the loan, no matter the size of the loan. These lines of credit last for one year or less.

International Trade

These are long-term loans offered to businesses that are either expanding because of export sales or need to modernize to address the adverse effects of imports from foreign competition. These loans are similar to the Export Working Capital loans in size and guarantees, but they last much longer—10 years for working capital, machinery, and equipment, and up to 25 years for real estate.

Veterans Advantage

These low-fee loans are available to businesses that are at least 51% veteran-owned and controlled (spouses and widows of veterans count toward this requirement). Veterans may apply to other SBA loans and then apply the Veterans Advantage benefits to those loans.

CAPLines

CAPLines loans follow the general outline of the Standard 7(a) loan, but rather than a lump-sum loan, CAPLines extends an ongoing line of credit. This line of credit is meant to help small businesses meet short-term and cyclical working capital needs.

How Long Does It Take to Get an SBA 7(a) Loan?

The SBA 7(a) loans broker in New Jersey and SBA 7(a) loans broker in New York on an average take five to ten business days, but every case is unique. And for those in a hurry, the SBA Express loan has an accelerated turnaround time of 36 hours.

FAQs

What is an SBA 7(a) Loan?

An SBA 7(a) loan is a financial tool planned by the Small Business Administration (SBA) to get money into the hands of small business owners. An SBA 7(a) loan is not a loan from the SBA directly, instead, the SBA helps small business owners secure loans by assuring a portion of the amount borrowed, limiting fees, and capping interest rates. When you apply for an SBA 7(a) loan, you work with a lender and the SBA loans broker in New Jersey and the SBA partakes by guaranteeing a part of the loan amount. This assurance from a government agency assists businesses get funds, even if they might not have otherwise qualified for a business loan.

Who can get SBA 7(a) Loan?

Eligibility prerequisites for the 7(a) loan program are based on quite a few key characteristics of the business and its owners. As per the SBA loans broker in New York, eligibility is based on how the company earns its income, the background of its owners and where it functions. But, there are some essential necessities to be eligible for help.

  • Be small, as defined by the SBA
  • Function for profit
  • Have sensible invested equity
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Use the funds for a business purpose
  • Be able to showcase a need for the loan proceeds
  • Not be aberrant on any existing debt obligations to the U.S. government
  • Use alternative financial resources, such as personal assets, prior to seeking financial assistance

How much time does SBA 7(a) Loan takes to get approved?

An 7(a) SBA loans in New York typically takes about two to three months to be approved. If you have the choice of working with an SBA Preferred Lender, your application might be approved much faster, comparatively speaking. Of course, the precise time it will take to be approved depends extremely on you and your lender. The process of receiving an SBA loan with typical lenders may take up to two to three months. A few lenders will offer funding in as little as 30 days, even though these efficient lenders are quite rare. The process necessitates patience; potential borrowers should go through many steps of paperwork and vetting. You will need to prepare all the required documents, meet with a lender, finish more documents, wait on underwriting, and at last, wait for closing.

In what way can I use money from an SBA 7(a) loan?

As per the Small Business Administration, there are a few rules on how you can and cannot use proceeds from an SBA-guaranteed 7(a) loan. Usually, the use of loan proceeds is very general as per SBA loans broker in New Jersey loan rules. But, there are some restrictions and limitations on the use of funds. An SBA 7a loan can be used for long-term or short-term working capital and to buy an existing business, refinance current business debt, or buy supplies, furniture, and fixtures.

What are the benefits of fixtures SBA 7(a) loans?

SBA 7(a) loans come with a vast range of benefits, some of which are mentioned below:

  • Long loan terms, up to 25 years
  • Highly competitive, low-interest rates
  • A variety of businesses are eligible
  • Fixed and variable-rate options are available
  • Low down payments, typically around 10-20%
  • Most SBA loans, including 7(a) loans are fully amortizing, which means borrowers do not have to worry about balloon payments
  • Variety of loan options, including SBA 7(a) express loans, SBA 7(a) CAPLines

The SBA does not lend money to small businesses directly in the form of a 7(a) loan. You should first search for an SBA-approved lender. The SBA loans in New York will ask you to finish an application for a 7(a) loan, and you will work with the lender on the paperwork necessary by the SBA.

How can I use money from an SBA 7(a) Loan?

According to the Small Business Administration, there are some rules on how you can and cannot use proceeds from an SBA-guaranteed 7(a) loan. Typically, the use of loan proceeds is very general according to SBA loan rules. However, there are some limitations and restrictions on the use of funds.

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