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What Are Sba 7a Loans and What Are the Eligibility Requirements?

SBA 7a loans are a great way to finance an organization and options are great for businesses. Learn about the different types and eligibility.

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What Are Sba 7a Loans and What Are the Eligibility Requirements?

SBA 7a loans are a great way to finance an organization and with nine types, options are great for businesses. Learn about the different types and eligibility.

SBA 7a Loan

SBA 7a loans for your business can make the difference between keeping your business afloat or losing it. SBA7a loans were created for that reason.

No one wants to see you lose the business you dreamed of and worked hard to obtain. You now need an SBA 7a loan but can't figure out how to get one. You might have an SBA 7a loan already and need to modify it.

SBA 7a loans have eligibility requirements, which you can find more information and legal services on what options you have in SBA 7a loans.

SBA Loan Definition

If you are going to deal with an SBA small business loan it's important to understand what it is. An SBA7a loan offers you a finance option guaranteed by the Small Business Administration. The reason the SBA loans are so popular and needed by many small businesses is important to understand. The SBA loans reduce the risk on the part of any lender and are also guaranteed by the Small Business Administration.

Its basic creation was built for businesses that cannot find other or more traditional loans. You can then use the loan with the SBA loan guarantee for whatever your small business needs to succeed. Frequently it is for starting up a small business, getting an influx of cash in a business a bit stagnant or other varied reasons.

A few of the best things about an SBA small business loan is;

  • The loans can be used for any size business
  • Small business loans have excellent terms and fees
  • There are no penalties for prepayments

There are nine types of SBA small business loans, and we are going to go over them all so you have the most relevant information on what an SBA small business loan can offer you.

SBA 7a

Ther nine types of SBA small business loans include:

  • Standard 7(a)
  • 7(a) Small Loan
  • SBA Express
  • Export Express
  • Export Working Capital
  • International Trade
  • Preferred Lenders
  • Veterans Advantage
  • CAPLines

Each of them offers the small business owner something unique, and we are going to go over the benefits and eligibility terms for these small business loans below.

  • The Standard 7(a) Loan is the small business loan most people already know about or think of with the Small Business Administration loan programs. It is also the one used by most businesses.
  • Turnaround is 5-10 days
  • You can get up to 5 million dollars
  • Your loan has a maximum SBA guarantee of 75-85%
  • Then we have the 7(a) small loan like the Standard 7(a) loan but meant for smaller businesses needing a smaller amount.
  • Turnaround is again 5-10 days
  • You can get up to $350,000
  • Your loan has a maximum of 85% for loans less than $150,000 and 75% for loans between $150,000 - $350,000

These are the typical small business loans many people know and use with the SBA. But we are going to tell you about some other ones you may not know about.

SBA Loan Variety and Eligibility

The SBA recognizes you may need capital for your business in a hurry. They also understand you and your business are at a make or break time. So they created the 7(a) Express Loan.

  • The 7(a) Express Loan provides your business dollars at an accelerated rate.
  • The loan gives you a turnaround time within 36 hours
  • You can get up to $350,000
  • Your SBA guarantee drops to 50%
  • The 7(a) CAPLines loan is unique. It allows you to get short-term loans for your business's cyclical needs. Which means;
  • Seasonal — Your loan will finance during a season when your accounts receivables, inventory, or labor costs increase
  • Contract — This is when you need funding for increased labor and material costs due to a contract
  • Builder — This is for small general contractors and builders because it serves as your collateral for your working project
  • Working — This loan is for a business that can't get long-term credit
  • The Export Working Capital Loan is designed for businesses in export sales.
  • Turnaround is 5-10 days
  • You can borrow up to $5 million
  • In this loan, there are urgent export working capital loans when you cannot keep your business afloat without it. The SBA will respond in 24 hours and give you up to $500,000.
  • International Trade Loan is for businesses with long-term financial needs. Your business needs to have foreign competition, and you can use it for fixed assets, real estate construction, equipment, or just working capital.
  • The turnaround is 5-10 days
  • You can borrow up to $5 million
  • The SBA maximum guarantee is 90%

SBA Small Business Loans Eligibility

The SBA also has some SBA loans designed for a designated group of people to help them ope or sustain their businesses.

  • Preferred Lender loan gives any SBA lenders more control with processing, closing, servicing or liquidating loans
  • The Veterans Advantage loan is for businesses that are 51% owned by veterans.

When you are considering a loan from the SBA, you need to understand they are flexible and provide you a lower payment. Most of the time interest rates range between 2.25% - 4.75%. The interest rates are lower than conventional loans and the SBA 7a loans are easier to get.

You can also use the loan funding for projects that help your business grow and develop. You won't have balloon payments to worry about, and will have money to cover soft costs. But your business must qualify as a small business for all the SBA loans. The government has a 'small business' definition you must meet, and any mid-sized businesses won't meet the guidelines.

SBA Core Disciplines

If you are in business and already worked through the SBA application terms but are having issues with your current SBA loan, our experienced SBA attorneys can help. Our attorneys are trained in six core SBA disciplines

The six basic services are:

  1. Finance & Accounting
  2. Constitutional Law, Contract Law, Equitable Remedies, Federal Administrative Law & Procedure
  3. Commercial & Banking Litigation
  4. Risk Management & Asset Exemption Protection
  5. Bankruptcy Law
  6. Negotiations

Our legal expertise provides negotiated and settled SBA debt. But our legal team provides so much more with most SBA issues or concerns you have.

Reach out to us today if you need your SBA processes resolved. When you are dealing with the SBA, the sooner you begin your negotiations, the better. Don't let the stress of an SBA loan drive your business in circles. We can show you how your business path can move forward once again.

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure

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Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements

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Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

Clients personally guaranteed SBA 504 loan balance of $750,000.  Clients also pledged the business’s equipment/inventory and their home as additional collateral.  Clients had agreed to a voluntary sale of their home to pay down the balance.  We intervened and rejected the proposed home sale.  Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.

$505,000 SBA 7A LOAN - FEDERAL DISTRICT COURT LITIGATION (CALIFORNIA)

$505,000 SBA 7A LOAN - FEDERAL DISTRICT COURT LITIGATION (CALIFORNIA)

Clients borrowed and personally guaranteed an SBA 7(a) loan.  Clients defaulted on the SBA loan and were sued in federal district court for breach of contract.  The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan.  We were subsequently hired to intervene and aggressively defend the lawsuit.  After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.

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