Financing Your Small Business with SBA Loans
SBA (Small Business Administration) loans are bank-provided financing for small businesses that the government partially guarantees. Since the SBA assumes some of the lender’s risk, banks can offer SBA loans to business owners who might not qualify for traditional loans.
SBA loans help you preserve your capital and maximize your cash flow while securing your small business funding. As an award-winning SBA Preferred Lender, Consumers National Bank can save you time searching for financing solutions.
Connect with one of our experienced Business Development Officers today! We’ll review your business plan and find the best loan to support your goals.
The primary forms of SBA loans are:
SBA 504 Loan
Also known as the Certified Development Company (CDC) program, the SBA 504 loan provides financing at below-market interest rates to purchase fixed assets such as:
- Commercial real estate
- New construction or building improvements
- Heavy equipment or machinery
The SBA 504 loan program works by distributing the loan among three parties. The business owner makes a 10% down payment, Consumers National Bank adds 50%, and the CDC contributes the remaining 40%.
SBA 504 loans offer fixed rate interest with terms ranging from 10 years for equipment up to 20 years for real estate.
SBA 7(a) Loan
The SBA 7(a) loan offers general purpose financing, usually with a variable interest rate (although some fixed rate options are available). Companies can use SBA 7(a) funds to:
- Buy or expand a business
- Build or buy commercial real estate
- Make improvements on leased buildings
- Purchase inventory or equipment
- Refinance existing business debt
- Obtain working capital
SBA 7(a) loans require a 10% down payment from the borrower. Available terms are usually 5 to 7 years for working capital, up to 10 years for equipment, and up to 20 years for real estate.