SBA Loan Requirements and Eligibility

Learn more about specific requirements you may have to meet to be eligible for an SBA loan through SmartBiz Loans.

LOANS UP TO
$5 million
INTEREST RATES
5.75% - 8.00%*
LOAN TERMS
10 - 25 years

SBA Loan Requirements

Many small businesses from a broad range of industries can be approved for an SBA 7(a) loan. Rather than listing what businesses are considered for approval, the Small Business Administration lists those industries that are excluded, such as:

  • Gambling
  • Life insurance
  • Religious teaching
  • Primarily political and lobbying activities
  • Oil wildcatting
  • Mining
  • Mortgage servicing
  • Real estate development
  • Bail bond
  • Pawn or private clubs

For the detailed list of ineligible businesses, head to the SBA’s website to learn more.

If your business does not fall under one of the excluded categories, the next step is to meet the following common eligibility requirements for an SBA loan.

These are the eligibility requirements to apply for a $30,000 to $350,000 SBA 7(a) Working Capital or Debt Refinance Loan through SmartBiz:

  • Time in business must be above 2 years
  • Business owner’s personal credit score must be above 650
  • The business must be U.S. based and owned by US citizen or Lawful Permanent Resident who is at least 21-years old
  • No outstanding tax liens
  • No bankruptcies or foreclosures in the past 3 years
  • No recent charge-offs or settlements
  • Current on government-related loans

The eligibility requirements to apply for a $500,000 to $5,000,000 SBA 7(a) Commercial Real Estate Loan through SmartBiz are:

  • Time in business must be above 2 years
  • The business owner’s personal credit score must be above 675
  • 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.
  • Sufficient business and personal cash flow to service all debt payments, demonstrated by 3 years of tax returns and interim financial data
  • No delinquencies and/or defaults on government loans
  • If considering our rent replacement option, this requires a loan payment that does not exceed the current monthly lease expense

Typically, businesses approved for an SBA loan through SmartBiz have $50,000 to $5 million in annual revenues and 1 to 40 employees. Most are profitable and cash flow positive. All can provide proof that they are able to make the monthly loan payment.


SBA 7(a) Loan - Uses of Proceeds

Depending on the amount you want to borrow, you can use the funds from an SBA 7(a) loan for a variety of purposes like refinancing high-cost debt, hiring, inventory, marketing, or purchasing commercial real estate.

  • $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 refinancing 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 that is 51% owner-occupied.

Not eligible for an SBA loan?

If you don’t meet the requirements to qualify for an SBA loan right now, we won’t leave you hanging! Instead, we’ll work with you to help you improve the critical factors of your business, like credit scores or cash flow, that can help you to qualify in the near future.

Check out our Small Business Blog for helpful resources about raising your scores and improving your likelihood of getting funded.


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