Maximum SBA Loan Amount Limits and Eligibility Criteria

The Small Business Administration (SBA) offers a variety of loan options to support small businesses, but it's essential to understand the maximum SBA loan amount limits and eligibility criteria to ensure you're eligible for the funding you need.

The maximum SBA loan amount limits vary depending on the type of loan. For example, 7(a) loans have a maximum loan amount of $5 million, while 504 loans have a maximum loan amount of $5.5 million for the first mortgage and $5.5 million for the second mortgage.

To be eligible for an SBA loan, you must have a strong credit history and a solid business plan. Your business must also be in operation for at least two years, and you must demonstrate a need for the loan funds.

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The 7(a) loan is a type of loan provided by the Small Business Administration (SBA) that offers financial help to small businesses with special requirements.

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One of the key features of a 7(a) loan is that it can be used for a variety of purposes, including acquiring, refinancing, or improving real estate and buildings, as well as purchasing and installing machinery and equipment.

You can use a 7(a) loan for short- and long-term working capital, refinancing current business debt, or even purchasing furniture, fixtures, and supplies.

The maximum loan amount for a 7(a) loan is $5 million, which can be a significant amount of funding for small businesses.

Here are some of the specific purposes a 7(a) loan can be used for:

Applying for a SBA loan can be a straightforward process. You can pre-qualify for up to $500,000 in just five minutes with SmartBiz.

Their dedicated team and streamlined application process make it easier than ever to find the right loan for your business needs.

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The maximum SBA loan amount is a crucial piece of information for any business owner considering an SBA loan. The SBA 7(a) loan has no minimum, but commonly no less than $30,000, and a maximum of $5 million.

You can borrow up to $5 million using the SBA 7(a) program for business purchase, buying a business, partner buyout, or partner buy-in. However, if you have two businesses, the SBA loan maximum is $5 million per business, totaling $10 million.

The SBA 504 loan limits are a bit different. With a 20% down payment, the maximum SBA loan is $10 million, but if you're only putting down 10%, the maximum SBA loan is $5 million.

Here's a breakdown of the maximum SBA loan amounts:

With the right lender and a strong business, you may even be able to get an SBA max loan of up to $10 million with a conventional second mortgage behind the SBA guaranteed first.

Guarantees can be a significant aspect of SBA 7(a) loans. The maximum guarantee for lenders is $3.75 million on the $5 million maximum loan amount.

The guarantee amount fluctuates based on the loan amount and program type. For loans of up to $150,000, the guarantee amount is up to 85%, while loans over $150,000 have a lower guarantee amount of up to 75%.

The SBA also charges a guarantee fee, which is a percentage of the guaranteed portion of the loan. For longer loans, this fee can add up quickly. Here's a breakdown of the fee schedule as of October 1, 2023:

The SBA guarantee is a crucial aspect of the 7(a) loan program. It's the government's promise to repay a portion of the loan if the borrower defaults.

The maximum guarantee for lenders is $3.75 million on the $5 million maximum loan amount. This means that if a borrower defaults, the government will cover up to 75% of the loan.

Loans of up to $150,000 have a higher guarantee amount of up to 85%. This is great news for smaller businesses that need a little extra security.

An SBA lender can opt to take a lower guaranty, typically 75%, but can choose a lower amount in certain cases. This allows them to offer a higher loan amount to stronger borrowers.

For instance, a lender might take a guaranty of just 67.3% to offer 100% financing to a borrower. This is what happened with a doctor who needed a loan of up to $5.575 million to build a new office.

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If you're considering an SBA 7(a) loan, it's essential to understand the interest rates and fees involved. The prepayment penalties can be steep, especially if you pay off your loan early. The penalty only applies to the first three years, starting at 5% of the outstanding balance in the first year.

Each year, the penalty declines: in the second year, the prepayment penalty is 3%, and in the third year, it reduces to 1%. This means that if you pay off your loan after three years, you won't have to worry about prepayment penalties.

The SBA also tacks on a guarantee fee to your loan agreement. For short-term loans, there's no fee for anything under $1 million, but for longer loans, the fee schedule is more complex. Here's a breakdown of the upfront guarantee fee for longer loans:

Interest rates on SBA 7(a) loans also vary depending on the loan amount and maturity. For loans of $25,000 or less, the interest rate is Prime rate + 4.25% for maturities of less than 7 years, and Prime rate + 4.75% for maturities of more than 7 years.

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You can now take advantage of the SBA's record lending to fuel your business growth, with opportunities to pre-qualify for a loan without impacting your credit score.

The SBA's record lending means more businesses are getting the funding they need to expand and succeed. This is a great time to explore your loan options and see what's available to you.

With the SBA's record lending, you can now access more loan opportunities and potentially increase your chances of getting approved. This can be especially helpful for small businesses that may have struggled to secure funding in the past.

Pre-qualifying for a loan without impacting your credit score can give you a clear idea of how much you can borrow and what your monthly payments will be. This can help you make informed decisions about your business's financial future.

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The Small Business Administration (SBA) offers various loan programs to support small businesses.

The maximum SBA loan amount varies depending on the specific loan program. The 7(a) loan program, for example, has a maximum loan amount of $5 million.

SBA Express loans have a higher maximum loan amount of $500,000. This is because they are designed for smaller, more urgent financing needs.

The SBA Microloan program has a relatively small maximum loan amount of $50,000. This program is geared towards very small businesses or startups.

SBA loans are often used for working capital, expansion, or equipment purchases. The specific use of funds can impact the loan amount and terms.

The maximum SBA loan amount for commercial real estate or commercial property is approximately $16 million with 20% down/20% equity or $11.25 million with 10% down/10% equity.

The SBA 504 loan program allows for larger loans than the 7a program, but it requires a down payment. The maximum loan amount is dictated by the size of the 504 second mortgage, which has a max amount of $5 million unless your loan qualifies as an SBA Green Loan or if you are a manufacturer.

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For Export Express loans, the maximum loan amount is $500,000, and the SBA guarantee percentage is 90% for loans of $350,000 or less, and 75% for loans more than $350,000.

Here are the top five industries to access SBA funds, based on the most recent data:

Export Express is a loan program designed to help small businesses develop their export side. It offers a higher guarantee to mitigate international credit risk, making it a more attractive option for lenders.

The maximum loan amount for Export Express is $500,000. This can be a game-changer for businesses looking to expand their international reach.

Lenders can negotiate the interest rate with borrowers, but it may not exceed the SBA maximum. This flexibility can be beneficial for businesses with varying cash flow needs.

Revolving lines of credit are available through Export Express, but they may not exceed seven years. This can provide businesses with the flexibility to manage their finances and make payments over time.

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Here are the key details of the Export Express program:

For more information on the Export Express program or to get application assistance, businesses can contact their local U.S. Export Assistance Center.

Small businesses across different industries can access SBA funds through the SBA 7(a) loan program. The top five industries to access SBA funds are Construction, Accommodations and Food Services, Retail, Professional, Scientific, and Technical Services, and Health Care and Social Assistance.

Half of all SBA loans are under $150,000, with the majority being under $50,000. However, small businesses may now apply for higher loan amounts.

If you're a small business owner, you might be wondering what loan options are available to you. The SBA 7(a) loan program offers a range of options, including the 7(a) Small loan, which is a term loan of $500,000 or less.

Here are the details of the 7(a) Small loan:

Keep in mind that the 7(a) Small loan excludes certain types of loans, including Standard 7(a) loans, SBA Express, Export Express, CAPLines, and Export Working Capital Program (EWCP) loans.

The maximum SBA loan amount for commercial real estate or commercial property is approximately $16 million with 20% down/20% equity or $11.25 million with 10% down/10% equity.

The SBA guaranteed portion of any SBA 504 loan financing offer is actually just the second mortgage, which has a max amount of $5 million.

The 504 loan "size" is determined by an SBA rule that states the 504 (2nd mortgage) loan can be no more than 30% to 40% of the total financing for a commercial property (or equipment).

A traditional 504 loan transaction is structured as "50/40/10" with an SBA lender providing the "50" in the form of a first mortgage and the SBA providing a second mortgage for the "40".

The purchase price of a property is a key factor in determining the maximum SBA loan amount, as seen in the example of a $12.5 million property.

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