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SBA Loan Eligibility & Benefits

T.J. Casady,

January 29, 2015

Building Your Business


SBA Loans, due to their unique structure, are a great option for tons of businesses in virtually every industry. Their advantages typically include lower down payments and greater flexibility, yet many business owners aren't clear about whether or not they qualify for this type of financing. I've included some widely-accepted guidelines below. If you're still not sure if your business fits SBA guidelines, contact me and I'll help you figure it all out.

Who’s eligible? Is your business a "Small Business?"

Banks adhere to industry size standards established by the U.S. Small Business Administration, which are based on the NAICS codes that best describe your business. Chances are, if you fit these three criteria, you are considered a small business and are likely eligible for an SBA guaranteed loan.

  • Fewer than 500 employees
  • Less than $7.5 million in annual gross revenue, and
  • Less than $5 million in average annual after tax profits

Why use an SBA loan? What do you gain?

  • The U.S. Government provides up to an 85% guarantee on your loan, providing additional collateral support
  • Significantly lower down payment or equity requirements (as low as 10%) than traditional commercial loans
  • Quicker approval and closing for loan amounts less than $350k due to streamlined SBA programs

What to look for in an SBA lender

  • Strong knowledge of SBA programs
  • It's a good idea to work with a bank that has earned a "Preferred Lender" status from the SBA. They'll be able to make quicker decisions in-house rather than going through a bureaucratic chain of command.
  • Choose a bank that will service your loan locally. You'll get more responsive service, plus the advantages of the SBA. Now that's a win-win.
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Hello. I’m looking to get funds to purchase a storage building. I own the lot and will cover the building site preparation and erecting of building. This would be for rv, camper, boat, and ag equipment storage in McCool Junction. The lot I own is zoned commercial and I intend to be the sole proprietor of the storage facility. Looking at 25k to 35k as far as funds for the material to build a 52 x 81 building or there about, with over 4000 sq ft of storage. I would also like to set up direct deposit for repayment directly from my employer earnings. I am interested in an SBA to get up and going if it is applicable to my situation. I have folks interested in storage for big items, just no building yet. Looking forward to talking. Thank you!

This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.