Why SBA loans are worth the paperwork
Loans backed by the U.S. Small Business Administration are made by banks and other SBA-approved lenders, with the SBA guaranteeing part of the loan. That guarantee lets lenders offer longer terms, lower down payments and competitive rates compared with most other small business financing. The trade off is more documentation and a longer approval process.
BKH Fund does not make SBA loans. We help you understand which program fits, prepare and package your application, and match your file to SBA-approved lenders and term loan providers in our network.
SBA 7(a) loans
The SBA 7(a) program is the most flexible SBA loan, with amounts up to $5 million. It can be used for:
- Working capital and inventory
- Buying an existing business or a partner's share
- Purchasing or refinancing owner-occupied commercial real estate
- Equipment, furniture and fixtures
- Refinancing qualifying business debt
Terms are typically up to 10 years for working capital and equipment and up to 25 years for real estate.
SBA 504 loans
The SBA 504 program is built for major fixed assets such as owner-occupied buildings, land, construction and long life equipment. A 504 loan pairs a bank loan with a loan from a Certified Development Company, which can mean a lower down payment and long term fixed rates on the CDC portion.
Conventional term loans
Not every business fits SBA rules, and some owners cannot wait for SBA underwriting. Conventional and alternative term loans through our partners provide a lump sum with fixed payments over a set term, often with faster approval and less paperwork than SBA, at a higher cost.
| SBA loans | Conventional / alternative term loans | |
|---|---|---|
| Cost | Usually among the lowest available | Higher, varies by lender and risk |
| Terms | Up to 10 years, or 25 for real estate | Typically shorter |
| Speed | Weeks to a few months | Days to a few weeks |
| Paperwork | Tax returns, financials, business plan items | Lighter, often bank statement based |
| Best for | Real estate, acquisitions, big projects | Faster needs or profiles outside SBA rules |
Common SBA requirements
- A for-profit business operating in the U.S. that meets SBA size standards
- Reasonable owner investment or equity in the project
- Ability to repay from business cash flow
- Business and personal tax returns, financial statements and a debt schedule
- Owners with 20 percent or more ownership typically provide a personal guarantee
How we help
We review your situation, tell you whether SBA or another product is the better path, give you a clear document checklist and package your request for lenders that are actively doing deals like yours. If SBA is not a fit right now, we show you faster alternatives and what it would take to qualify for SBA later.