SBA Small Business Loans
Low interest funding for new and existing businesses.
SBA loans make it easier to start, buy, or grow your business.
Traditional business loans are hard to qualify for, require significant down payments, and have high interest rates. So why barter with banks for good loan terms when you can work with Guidant to find lenders who want to bankroll your loan? SBA loans make it easier to get the money your business or franchise needs.
Lower Interest Rates
SBA loan interest rates are lower than traditional business loans, making repayment less of a burden — which gets you to profitability faster.
Flexible Down Payment
SBA loans can be combined with other forms of financing — like unsecured loans or 401(k) Business Financing — saving you on out-of-pocket costs.
Easier Loan Application
What Are SBA Loans?
The Small Business Administration (SBA) supports American small business by providing increased access to affordable funding. The SBA encourages traditional lenders like banks and credit unions to provide loans with favorable rates and repayment terms through SBA lending programs.
With some emergency exceptions, the SBA doesn’t loan directly to small business owners. They support lenders by guaranteeing a portion of the loan, which removes some of the lender's risk. The SBA’s loan programs are meant to encourage people of all backgrounds to embark on the American Dream.
An SBA loan is traditional debt-based financing with advantages for small business owners. These loans provide up to $5 million in small business funding, which can be used for starting a new business or franchise, purchasing an existing business, expanding operations, buying equipment, purchasing commercial real estate, or acting as working capital. Though these loans are approved and funded through individual banks, the SBA guarantees 50 to 90 percent of the loan if it goes into default, which is why lenders are willing to offer favorable terms and conditions to small business owners.
There are a number of SBA loan programs, but Guidant specializes in three types.
SBA 7(a) Loan
SBA 7(a) Small Business Loans offer up to $5 million in financing that can be used for almost any business purpose, including startup, acquisition, or expansion. Loan proceeds can be used as working capital, or to purchase real estate, equipment, inventory, etc. SBA 7(a) loans can be combined with other forms of small business financing to help you reach your funding needs.
SBA Working Capital Loan
SBA Working Capital Loans offer a simple financing solution for small business owners who need $75,000 to $150,000 for business operations. These loans provide the same government guarantee and lower interest rates as traditional SBA loans but can close in as little as 45 days — about half the time it takes to close a traditional SBA loan. Unlike other business loans that require 20 to 30 percent down payments and are secured by personal collateral, SBA Working Capital Loans only need 10 percent down and are secured by your business assets — not personal assets like your home. As a working capital loan, your business needs to be open or able to operate before the loan funds.
SBA Express Loan
SBA Express Loans are a form of SBA 7(a) Loans. These loans are for small businesses that only need between $25,000 and $350,000 in quick cash. SBA Express Loans have a 50 percent guaranty from the SBA, so many lenders won’t choose this option for a new business. Instead, they'll opt to use SBA Express Loans for expansion costs. An SBA Express loan can be either a revolving line of credit with your lender or a term loan. Many business owners combine the express line of credit with an SBA 7(a) Loan to provide extra working capital.
SBA loan interest rates are based on the daily prime rate (set by the Federal Reserve) plus the lender’s spread. SBA loans normally have a variable rate, which means the interest rate can fluctuate over time. Some lenders might opt for a fixed rate, which means your interest rate won’t change over the lifetime of the loan. Some lenders may even do a fixed rate for a portion of the loan term — for example, a 10-year loan could have a fixed rate for three and a variable rate for seven years.
All SBA loan programs require you to make a down payment. Though the requirements range from about 10 to 30 percent of the principal, the inability to make a large enough down payment can disqualify you from being approved. Fortunately, you can use other forms of funding to cover some or all your SBA loan down payment — including 401(k) Business Financing, also known as Rollovers for Business Startups (ROBS).
A repayment schedule, also known as an amortization schedule, is included in your SBA loan terms. It’s possible to save money on interest payments if you can pay the loan back over a shorter period. However, your monthly payments could be more manageable over a longer time period. Most SBA loans are amortized over 10 years with no prepayment penalty for terms under 15 years.
Most SBA lenders require business owners to sign a personal guarantee to be approved for a loan — which is common with debt-based financing. This guarantee is an agreement to use personal assets to cover the loan if the business can’t pay it back. That means if your business fails while the loan is still being repaid, you and other owners become personally responsible for the remaining loan amount. Personal guarantees are binding regardless of your entity type.
Closing costs and fees for SBA loans vary depending on the type of SBA loan you use. With 7(a) loans, Guidant usually estimates about 5% of the project total as the closing cost. However, your costs could be higher or lower depending on your lender and the type of project.
The 5 C’s of SBA Loan Eligibility
There are five primary elements that lenders consider in SBA loan applications. These “five C’s” can help you understand if you’re a qualified candidate for an SBA loan.
It’s key to be able to cover the down payment of an SBA Loan. When lenders don’t cover 100 percent of your project cost, they feel reassured knowing that you have a personal stake in the success of your business. The amount of down payment you’ll need depends on your business and the type of SBA loan you’re applying for.
But if you can’t cover a down payment out-of-pocket, you aren’t out of luck. SBA loans can be combined with other forms of funding, like 401(k) business financing or unsecured loans.
Your credit score and credit history play a role in your approval for SBA lending. Most lenders look at your personal and business FICO score. A 680+ personal score and 160 business score are typically the minimum requirements for SBA loan approval. Credit events, like a recent bankruptcy, can have a negative impact on your application.
Capacity means how your business will generate income (or cash flow) to repay your SBA loan. Your household income and the current/anticipated income from your business all play into the lender’s confidence in your ability to make your monthly payments. If you’re funding a new business, lenders put more weight on your outside income sources. If you’re purchasing an existing business, they’ll look at the business’s tax returns and recent financials.
Lenders look at your personal and business character when evaluating your strength as a borrower. Your business experience is a factor for lenders. While you don’t need experience in the industry of the business you’re funding, it helps. You’ll provide information about events in your personal history, like child support payments, criminal convictions, and recent arrests.
Your personal property may be used as collateral to secure your loan. For example, the bank may take a lien against your home to use as security if the loan goes into default. Unlike the other eligibility requirements, it’s possible you might not be denied a loan if you don’t have enough collateral to secure it — it can depend on how you met the other requirements.
You don’t have to rank perfectly for each of the five C’s to get approved for a loan. All five elements are indicators of your attractiveness to lenders. They’re not considered individually in a vacuum, so all five C’s play together when lenders are looking at you as a prospective borrower.
Get Money for Your Business in 3 Easy Steps
It’s easy to get started! Simply complete our pre-qualification survey to start following your small business dreams.
Schedule a Call
We’ll send you a link where you can provide us your loan info, details about your business, and some financial information. Then we’ll analyze your loan package.
We’ll help you through the SBA loan application process. With just one application, you’ll access our extensive lender network to get the best loan options for you.
See How Much Money You Qualify For Today
Receive a list of funding options tailored for you.
Common Types of SBA Loans
SBA 7(A) LOAN
SBA 7(a) Loans can be used for almost any business purpose, like starting, buying, or expanding a business.
SBA EXPRESS LOAN
SBA Express Loans provide quick funding for new or existing businesses. With the option to be used as an express line of credit, SBA Express Loans combine well with SBA 7(a) Loans to provide extra working capital.
SBA WORKING CAPITAL LOAN
SBA Working Capital Loans offer a simple financing solution when you need extra operating funds. They close much faster than an SBA 7(a) Loan.
Why Work With Guidant?
We’re the experts.
We’ve helped over 20,000 small businesses get funded. From 401(k) business financing to SBA loans, we know how to get you the money you need to start or buy a business.
We’re with you.
We’re not just here to get you funded — we’re invested in the lifespan of your business. With our ongoing 401(k) plan support and full suite of business services, we’re with you for the long haul.
We’ve got your back.
We have the lowest IRS audit rate in the industry. Thanks to our award-winning legal team, no Guidant client has ever experienced adverse IRS outcomes when following our plan.
Cover Your SBA Loan Down Payment With 401(k) Business Financing
You don’t need to cover your SBA loan down payment out of pocket or with another loan. Instead, you can combine small business financing methods by using your retirement funds as the down payment on an SBA loan — without triggering any tax penalties or draining your personal savings.
While both SBA loans and 401(k) business financing have advantages as stand-alone programs, together they can set you up on a path for success with a higher funding amount and lower monthly payments.
Ready to take the next step?
Get in touch with a Guidant expert to find out which programs, and how much, you qualify for.