![]() New LLCs interested in applying for SBA 7(a) and/or SBA 504 loans should be able to demonstrate the following: Or, you may consider applying for both loans depending on your business needs and growth opportunities.Īpplying for an SBA-backed loan begins with an initial assessment to determine loan viability and business qualifications. New LLCs can choose to apply for either SBA loan option. Refinancing existing eligible real estate debts.SBA 504 loan funds can be used to pay for long-term fixed assets such as: When combined with the bank’s conventional loan, the two loans together can be for amounts of $10 million or more for projects. An SBA 504 loan may be approved for as much as $5 million with a fixed interest rate, a minimum down payment as low as 10%, and loan terms of up to 25 years for commercial real estate and up to 10 years for business equipment. SBA 504 funds are primarily intended for use on equipment purchases and real estate facilities, and not for working capital purposes.īorrowers work in conjunction with a lending bank and a local Certified Development Company (CDC) for approval and servicing of loans. One loan is made by a lending bank on a conventional basis and the other is the SBA loan. – SBA 504 loan: The SBA 504 loan differs from the SBA 7(a) in that it involves two simultaneous loans which together can total up to 90% of the total project costs. The versatility of SBA 7(a) loans and their wide range of uses for approved funds make them a popular choice among LLCs that need a steady cash flow while they execute their business plan. Business purchase, construction, expansions, renovations and refinancing of the same.– SBA 7(a) loan: SBA 7(a) loans are the most common type of SBA loan as they are primarily used for funding working capital and other business-critical expenses.Īpplicants may be approved for loan amounts as much as $5 million with loan terms of up to 10 years for equipment, leasehold improvements or working capital and up to 25 years for real estate, often with a variable interest rate and a minimum down payment as low as 10%.įunds from SBA 7(a) loans may be used for: Each has specific ways funds can be used, and they offer different loan terms and loan limits. Two primary SBA loan options are available for LLCs and other small businesses in need of financing: the SBA 7(a) loan and SBA 504 loan. SBA Business Loan for New LLC: Your Options When you choose SBA-backed funding for your financing needs, you can access LLC bank loans that will make a difference in helping get your new business off the ground and potentially on the path of long-term success. Industries most likely to benefit from SBA loans include: ![]() They typically offer several distinct benefits compared to other types of traditional lending, including competitive interest rates and fees, and benefits such as smaller down payments and favorable collateral requirements.Īlso, newer LLCs might not qualify for other financing resources, such as a business line of credit or traditional business loan, but may be eligible for SBA loans. SBA-guaranteed loans are a popular choice for LLCs for multiple reasons. Utilize alternative financing such as personal assets prior to applying for SBA loans.Have a feasible business plan detailing specific uses for funds. ![]() Do business in the United States and/or its territories.SBA loans are available to businesses that meet the following eligibility requirements: The primary function of the SBA is to help small businesses access the financial resources needed to build and grow their companies, resulting in a more robust economy and new jobs. Learn more about a business loan for new LLC purposes, how new LLCs can benefit from choosing SBA loans, and why Texas Gulf Bank is the best choice to help with an SBA business loan. The SBA is a federal agency that partners with banks to financially back business loans to small business owners in need of strategic and effective lending solutions. ![]() The Small Business Administration ( SBA) could be your best resource. If you have a new LLC business venture – or if you own a growing business with big expansion plans – you need business financing solutions that will provide you with funds for key purposes: Still, securing the funding needed to cover daily operations and necessary business expenses can take time and effort. Starting your own Limited Liability Company (LLC) may be the beginning of exciting opportunities in the business world. Seeking a Business Loan for a New LLC? Consider an SBA Loan December 19, 2022 ![]()
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