SBA 7(a) and SBA Community Advantage Loans
Up to $5 million in funding to provide businesses the support needed to start or grow
Let’s face it—sometimes finding a traditional business loan isn’t easy. That’s especially true if you’re a startup, in a “risky” industry like food and beverage or hospitality, or both. You need a stepping stone—a loan that can help your business grow to the point where you can more easily qualify at a bank.
If this describes you, the SBA 7(a) and SBA Community Advantage loan programs may be a great fit. SBA 7(a) loans and SBA Community Advantage loans provide funding for almost any business need including startup costs, working capital, equipment purchases and more. And, when you access the programs through Pursuit, you’ll work with a skilled SBA lender ready to process your application efficiently.
Fund almost any business need
Affordable interest rates
What is an SBA 7(a) loan?
The SBA 7(a) loan program makes funding from $50,000 to $5 million possible for startups and growing businesses in any qualified industry. The SBA 7(a) rates fluctuate, and the rate is determined by your financing needs. The SBA Community Advantage loan program, which provides loans of up to $350,000, is a unique type of 7(a) loan designed to provide additional support for businesses operating in underserved areas. In general, the program details are the same for SBA 7(a) loans and SBA Community Advantage loans. The SBA 7(a) loan qualifications and the SBA Community Advantage loan qualifications are similar as well.
- Loan amounts: Up to $5 million (maximum of $350,000 for Community Advantage)
- Interest rate: SBA 7(a) rates are competitive, variable interest rates determined on a case-by-case basis
- Time to funding: Approvals in 30-45 days after you submit a complete application, time to funding varies based on project
- Term: Up to 10 years for general funding; up to 25 years for real estate purchases
SBA 7(a) or Community Advantage loan requirements
If you believe in your idea and your plan, but do not currently meet bank loan requirements, you may be a candidate for a 7(a) or Community Advantage loan. Here are some general things to keep in mind before deciding to apply. If you meet some or all of these SBA loan requirements, you are a good candidate for the program:
- You have positive historic or projected cash flow
- You have a positive net worth or available equity to contribute to your business
- You have business assets or real estate to pledge as collateral
- You have a fair to good personal credit score and management experience in the industry your business operates in
- Your business is in an industry that has growth and positive business trends
What can you use an SBA 7(a) or Community Advantage loan for?
If you meet these SBA 7(a) loan requirements, you can use an SBA 7(a) loan or an SBA Community Advantage loan for almost any business expense. Multiple business expenses can also be combined into one loan. Here’s how business owners often use the SBA 7(a) loan program:
- Purchase owner-occupied commercial real estate
- Leasehold improvements or renovations
- Purchase of furniture, fixtures, and equipment
- Purchase of inventory
- Permanent working capital
- Business acquisition
- Debt refinance for any of the items listed above
Spark business growth with an SBA 7(a) or Community Advantage loan
SBA 7(a) loans can give your business the boost it needs to grow and qualify for traditional funding in the future.
SBA 7(a) and Community Advantage loan: Frequently Asked Questions (FAQs)
If you have a start-up or growing business but do not currently meet bank loan requirements, the SBA 7(a) or Community Advantage loan is right for you! And if your small business operates in an underserved community, the SBA Community Advantage loan program is right for you!
To be eligible for an SBA 7(a) or Community Advantage loan, your business must:
- Be a for-profit business
- Be considered a small business under the SBA’s standards
- Do business, or have plans to do business, in the United States
- Have business assets or property to pledge as collateral
- Have a demonstrated need for a loan
- Not have any existing debt to the United States government
The following criteria will help strengthen an application for a 7(a) loan:
- Your business has positive historic or projected cash flow to repay the debt
- Your business has a positive net worth or applicants with available equity to contribute the business
- While a loan application will not be declined for a lack of collateral, the
availability of real estate or business assets to secure the loan is beneficial
- You have a fair-to-good personal credit score and management experience in the industry the business operates in
- Your business shows industry growth and positive business trends
SBA 7(a) interest rates change based on the Federal Reserve’s actions, in addition to a lender spread (which is negotiated between the borrower and lender). Overall, SBA 7(a) interest rates are determined on a case-by-case basis. Learn more about how interest rates are calculated here.
Learn how other businesses have used the program to reach higher:
The SBA 7(a) loan program is administered by Pursuit BDC. The Community Advantage loan program is administered by Pursuit CDC.