Flexx Funding will help you facilitate your SBA Loan from A to Z

SBA Loan Programs:

7(a) Loan Guaranty Program

One of the SBA's primary loan programs, 7(a) offers loans up to $2,000,000. (The maximum the SBA can guaranty is $1,000,000.)

The 7(a) program is to help start-up and existing small businesses obtain financing when they are not eligible to obtain business loans through normal lending channels. SBA does

  not make the loans itself, but rather guarantees a portion of the loan made and administered by commercial lending institutions.

7(a) loans are the most basic and commonly used type of loans. Purposes for the loan can be  as follows:

Working Capital:

  Purchases of:
  Machinery and Equipment
  Furniture and Fixtures
  Land and Buildings
  Leasehold Improvements
  Debt Refinancing (under special conditions)

Loan maturity is up to 10 years for working capital and up to 25 years for fixed assets.

CDC/504 Loan Program

The 504 Loan Program provides small companies in development areas with guarantees for loans for major fixed assets such as land and buildings for economic development.  The purpose of the 504 loan is to improve the economy of a locality or to assist businesses owned by women, minorities, veterans, rural businesses, and other designated types of businesses. The 504 loans are set up to work with Certified Development Companies - non profit corporations set up for community development. Generally the project assets are used for collateral.

A Certified Development Company (CDC) is a non profit corporation set up to contribute to the economic development of its community. CDC's work with the SBA and private-sector lenders to provide financing to small businesses.  There are about 270 CDC's nationwide, with each covering a specific geographic area.

A typical 504 loan structure may look like this:

Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior CDC (backed 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being he wlped.

Businesses which receive 505 loan funding must meet size limits for small businesses, as

  defined by the of SBA which are as follows:  
  1. Business does not have a tangible net worth in excess of $7.5 million.  
  2. Business does not have an average net income in excess of $ 2.5 million for the proceeding two years.