The SBA 7 (a) is an extremely popular, flexible, and versatile small business loan. It’s commonly used for funding long-term needs like commercial real estate projects, business expansion, leasehold improvements for new construction or remodeling, inventory and equipment, working capital, and debt refinancing.
The SBA 7 (a) is the most popular SBA loan because it’s incredibly versatile and accessible to most business owners. Some common uses for the 7(a) loan include:
As with all loans, there are eligibility requirements. Businesses must demonstrate their ability to operate for a profit and cover their day-to-day operating expenses. The business owner(s) must also show that they have invested a significant amount of their own capital in the business and have good FICO® scores and payment history.
The SBA defines additional the eligibility criteria, including the following:
According to the SBA, some businesses may not qualify for a 7(a) loan. The SBA discusses ineligible businesses here.
"One of the biggest challenges for a small business is getting capital. But when we found Wasatch Peaks, it was a game-changer for us. They’re always there to give us help and lend us capital so we can get the equipment we need."
- Casey Pratt, Club Rec Owner
It’s natural to have a few questions, and we want to help you find the answers. Here are some frequently asked questions for your reference:
SBA loans are approved by the lender using SBA eligibility criteria requirements (covered above) as some of the many factors going into the consideration process. Our business loan officers also look at applicants’ credit scores using the FICO® Small Business Scoring Service® product (SBSS) and the businesses’ ability to generate profit and pay their operating expenses.
To determine whether you qualify for an SBA 7 (a) loan, you can reference this SBA 7 (a) eligibility worksheet.
The SBA offers different term loans. For loans used to buy real estate, the maximum loan term is 25 years. Other purchases, like machinery or renovations to an existing building, have a term maximum of 10 years that can sometimes be extended to 15-years.
SBA 7(a) Small Loans of $25,000 or less do not require collateral. For loans in excess of $350,000, the SBA requires collateral that is determined based on the capital and assets available to the business.
As you’d expect, you need to present thorough records and documents to demonstrate the soundness of your business. To help you get started, here’s an SBA 7 (a) loan application checklist. If you have additional questions after reviewing the checklist, we welcome you to contact our Business Development Department at 801-452-7885 or email them at email@example.com.
At Wasatch Peaks CU, our SBA loans come with our long-standing commitment to local businesses in the Davis, Morgan, and Weber counties. Our financial advisors are experienced in a diverse range of businesses and industries and are ready to help your business secure funding.