sba 504 vs 7(a)
SBA 504 Loan
SBA 7(a) Loan
Up to $5 million, $5.5 million for small manufacturers or specific energy projects.
Up to $5 million.
Construction, real estate purchase, property renovation, equipment financing.
A wide variety of uses, including working capital, expanding your business, acquiring another business, real estate purchase, property renovation, equipment financing or debt refinancing.
Maximum repayment terms
10, 20, or 25 years.
10 years for working capital and equipment. 25 years for real estate.
Fixed interest rate pegged to U.S. Treasury bonds.
Fixed or variable interest rate, based on the prime rate plus a lender spread.
SBA guarantee fee, GCC fees and bank fees.
SBA guarantee fee and bank fees.
Down payment requirements
10%, but higher for startups or properties with a specific use
* Have a business net worth of $15 million or less, and an average net income of $5 million or less. * Project must meet job creation and retention goals. * Be a for-profit business in the U.S or U.S. territories.
* Meet the SBA's definition of "small". * Be a for-profit business in the U.S. or U.S. territories. * Must have invested your own money in the business and attempted to use alternative financinal resourses.
- You need financing to purchase, lease, renovate, or improve commercial real estate, buildings, or equipment.
- You're making a larger investment in your business.
- You're able to show that you meet job creation, job retention, or public policy goals.
- You're okay with a slower loan application process.
- You can only afford a 10% down payment.