Frequently Asked Questions

About SmartBiz® SBA Loans


What is a SmartBiz SBA Loan?

SmartBiz Loans is the leading online marketplace for SBA loans. An SBA loan is a small business loan that is guaranteed in part by the U.S. Small Business Administration and typically made by a bank. SmartBiz® facilitates these loans through its marketplace of preferred SBA lending banks and helps increase approval rates by matching small businesses with the bank most likely to say “yes” to their loan. SmartBiz makes getting an SBA loan easy. Learn More


Why should I apply for an SBA loan?

SmartBiz SBA loans offer longer terms, great rates, and lower monthly payments than other loan options. The company’s advanced software streamlines the SBA loan application and origination process so small businesses can now apply online and get funds in as fast as 7 days while banks can make SBA loans more efficiently than ever before.


What are the advantages of an SBA loan?

Advantages include lower down payments and longer repayment terms than conventional bank loans, enabling small businesses to keep their cash flow for operational expenses and spend less on debt repayment.


What types of SBA loans does SmartBiz facilitate?

We facilitate SBA 7(a) loans for working capital, debt consolidation, and equipment purchases as well as SBA 7(a) loans for commercial real estate purchases or refinance.

SBA loans are considered the “gold standard” in small business lending because they have the lowest rates, low monthly payments and long 10-year terms with no pre-payment penalties. However, not every small business will initially qualify for an SBA loan. As a result, we also facilitate small business term loans through our bank partners. A small business term loan can help small business owners build their business if they don’t initially meet the requirements for an SBA loan.


How does SmartBiz Loans protect my identity and data privacy?

One of our top priorities is keeping your data private and secure. We use the same high levels of security as the largest banks and financial services institutions. Your data is encrypted on our network using high-level encryption, and we monitor every step of each transaction.

We use GoDaddy Secure Site as a third party verification to confirm that all transactions on the site are protected with up to 256-bit Secure Sockets Layer encryption.

To learn more about how we protect your financial information, please review our Privacy Policy.


Eligibility


What are the basic requirements?

Businesses that qualify for an SBA loan through SmartBiz typically have more than $100,000 in annual revenue. Most of our businesses are profitable and cash flow positive. All are able to show that they can afford to make our monthly loan payments. Learn More

SBA 7(a) Working Capital or Debt Consolidation Loans from $30,000 to $350,000

  • Minimum 2 years in business
  • U.S. based business owned by US citizen or Lawful Permanent Resident who is at least 21 years old
  • Good personal credit score of 600 or higher
  • No outstanding tax liens
  • No bankruptcies & foreclosures in the past 3 years
  • No recent charge-offs or settlements
  • Current on government-related loans

SBA 7(a) Commercial Real Estate Loans from $500,000 to $5 million

  • The real estate must be majority owner-occupied. This means that at least 51% of the square footage of the property you’re buying must be occupied by and used by your business.
  • Time in Business: 2+ Years
  • Business owners must have personal credit scores above 660
  • Cash Flow: Sufficient business and personal cash flow to service all debt payments demonstrated by 3 years of tax returns and interim financial data
  • SBA Specific Requirements: No delinquencies and/or default on government loans
  • The rent replacement option requires a loan payment that does not exceed the current monthly lease expense

Do I need to personally guarantee the loan?

All business owners who own 20% or more of the business must provide a personal guarantee. Married couples who collectively own 20% or more of the business when their shares are combined, must both provide a personal guarantee.


What industries are eligible?

From a hair salon to an online retailer to an accounting firm – there are many small businesses that are eligible for a SmartBiz SBA Loan and most industries are eligible. Industries that are excluded include gambling, lending, life insurance, religious teaching, primarily political and lobbying activities, oil wildcatting, mining, mortgage servicing, real estate development, bail bond, pawn or private clubs, among others.


What can I use my funds for?

Need new equipment? Is it time to hire another employee? Would you like to purchase or refinance commercial real estate? You can use your funds in a variety of ways depending how much you're borrowing. Learn More

  • $30,000 to $350,000 : Loans of this amount can be used for working capital (such as operational expenses, marketing, hiring, etc.), new equipment purchases, and to refinance existing business debt not secured by real estate (such as cash advances, business loans, and equipment leases).

  • $500,000 - $5 million: Loans of this amount can be used for the purchase or refinance of commercial real estate. To qualify, the real estate must be majority owner-occupied. This means at least 51% of the square footage of the property being purchased must be occupied by and used by your business.

I’ve been turned down by my bank before. Can I still get a SmartBiz SBA loan?

Yes. We have helped many small businesses obtain an SBA loan through our bank partners even after they have been turned down by other banks.


Can I get a second SmartBiz SBA loan?

Yes, many customers get a second SmartBiz SBA loan as their business grows and needs additional capital. If you receive approval for more than one SBA loan within 90 days of each other, the loans will be treated as if they were one loan for purposes of determining the amount of the SBA guarantee fees, if any.


What if I’m not eligible or don’t qualify for an SBA loan through SmartBiz?

Low rates, low monthly payments and long terms make SBA loans the “gold standard” in small business lending. However, not every small business initially meets the requirements for an SBA loan. As a result, we also offer business building term loans through our bank partners for small business owners that don’t immediately qualify for an SBA loan.

And if your small business can’t qualify for an SBA or a small business term bank loan, we still won’t leave you hanging! SmartBiz Loans works with non-bank lenders as well. We’ll work to help you find another type of loan that may be a good fit for your needs.


Pricing


What will my interest rate be?

Interest rates for SBA 7(a) loans are variable and depend on the loan amount:

SBA 7(a) Working Capital and Debt Consolidation / Refinance

  • 7.00% (Prime Rate plus 2.75%) for loans $50,000 - $350,000
  • 8.00% (Prime Rate plus 3.75%) for loans $30,000- $49,000

SBA 7(a) Commercial Real Estate Loans

  • 5.75% to 7.00% (Prime Rate plus 1.50% to 2.75%) for loans $500,000 - $5 million
Small Business Term Loan

Fixed Interest Rate - 7.99% - 18.99% (based on borrower’s business credit and financial profile as well as the term of loan)


Are there fees or other costs?

  • SBA 7(a) Working Capital or Debt Consolidation / Refinance Loans:  We charge a one-time referral fee of no more than 2% of the loan amount and a one-time packaging fee of no more than 2% of the loan amount. The SBA charges a guarantee fee. For loans of $125,001 to $150,000, the SBA guarantee fee is 2% of the guaranteed portion OR 1.7% of the loan balance. For loans of $150,001 to $700,000: SBA guarantee fee is 3% of the guaranteed portion OR 2.25% of loan balance. For loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% of the guaranteed portion over $1,000,000. For loans $125,000 and less, the SBA guarantee fee is waived.

    Bank closing costs typically add about another $450 and include standard bank fees though additional 3rd party report charges may apply.

  • SBA 7(a) Commercial Real Estate Loans:  For SBA commercial real estate loans over $500,000, SmartBiz Loans charges a one-time referral fee of no more than 0.5% of the loan amount and a one-time packaging fee of no more than 0.5% of the loan amount. The SBA charges a guarantee fee. For loans between $500,000 - $700,000, there is a 3% guarantee fee or 2.25% of the loan balance paid to the SBA. For loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% of the guaranteed portion over $1,000,000.

    Bank closing costs typically add about another $5,000 and include standard bank fees, appraisal, and title fees and an environmental search fee though additional 3rd party report charges may apply. SmartBiz fees are usually deducted from loan proceeds so you get the net amount when your loan is funded.

  • Florida Stamp Tax:  In addition, if the business owns commercial real estate in Florida and is matched with a lender from our marketplace based in Florida, there will be an additional Stamp Tax that is $0.35 cents per $100 of the total amount of the loan. A Stamp Tax is an excise tax imposed on certain documents executed, delivered, or recorded in Florida. All Florida based businesses receiving a loan financed by a Florida based bank are required to pay this tax that is taken out of loan proceeds by the lender to pay the tax before proceeds are distributed.

Even after fees, SBA loans are vastly cheaper than the majority of alternative financing and alternative lender options.

Small Business Term Loan: A small business term loan through a SmartBiz bank partner includes a standard 2% referral and 2% packaging fee. The closing cost is estimated to be $275.


Is a deposit required for third party closing costs?

For working capital loans, no deposit is required. If you are purchasing commercial real estate, a deposit will be required.


How much down payment or equity do I need to have for an SBA CRE loan?

If you apply through SmartBiz for an SBA commercial real estate loan over $500,000, a first lien on the real estate is required. Based on the appraised value, you must have at least 10% - 20% equity in the real estate for a refinance or put 10% - 20% down for a purchase of the real estate. If you qualify for the rent replacement option with minimal down payment, your loan payment cannot exceed the current monthly lease expense.


What are the repayment terms?

SmartBiz SBA 7(a) loans have far better repayment terms compared to many available alternatives. Our SBA 7(a) working capital loans have a 10 year term. SBA 7(a) Commercial Real Estate loans have a repayment term of 25 years. Our long repayment terms result in very low monthly payments. There are no balloon payments with a SmartBiz SBA 7(a) commercial real estate loan.

Small business term loans through our bank partners have a term of 2 - 5 years.


Are fees deducted from loan proceeds?

Yes. The one-time referral, packaging, and guarantee fees as well as closing costs are deducted from your loan proceeds at the time of funding. However, fees for other services, if any, are not deducted from loan proceeds.

For Commercial Real Estate (CRE) SBA 7(a) loans, packaging, referral, and SBA Guarantee fees can be rolled into the loan amount (if cash flow and loan-to-value allow for it).

For small business term loans, fees are deducted from loan proceeds.


Process


Will applying affect my credit score?

You can pre-qualify for a SmartBiz SBA 7(a) loan without impacting your credit score. To determine if your business is pre-qualified, SmartBiz reviews a soft pull of your credit report. This does not impact your credit score.

When your loan application proceeds to funding, SmartBiz Loans and its lenders request a hard pull on your credit, which appears as an inquiry on your credit report. This only happens after your application is in the funding process and matched with a lender who is highly likely to fund your loan.


What information about my business do you need?

We collect both financial information and specific business documentation. Typical financial information we collect are bank balances, a current income statement, current balance sheet, past net income, and outstanding loan information among other financial data. The larger the loan size, the more financial data is required.

Typical documentation usually required for an SBA loan include: Articles of Incorporation and Certificates of Good Standing; proof of insurance; lease agreements and landlord subordination among others that can be specific to your business type.


Do I need to provide collateral?

Yes, you need to provide collateral. For a SmartBiz 7(a) working capital or debt consolidation loan of $350,000 or less, a lien on business assets is required, which includes assets such as accounts receivable or inventory, as well as fixed assets such as new equipment purchased with loan proceeds or commercial real estate owned by the business. The value of these assets does not need to equal the loan amount you are requesting. For an SBA 7(a) commercial real estate loan, the collateral is the property itself.

For small business term loans through our bank partners, there may be a blanket lien placed on the business. If the use of proceeds is for an equipment purchase, a lien will be placed on that piece of equipment by the lender.


What is the process to sign my loan package?

We’ll either put you in touch with a notary after all documents have been reviewed or you will be able to e-sign your closing documents.


How long does it take to get my funds?

After completing the application, you can receive your funds in as fast as 7 days. Most loans only take a couple of weeks from application completion to funding. SBA 7(a) loans above $150,000 and SBA 7(a) commercial real estate loans up to $5 million typically take a bit longer, from 4-6 weeks. The faster you provide us your supporting documentation, the faster your loan can be funded. With your help, the process moves very quickly.


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