Wondering if you or your business idea may qualify for an SBA 7(a) loan, but aren’t sure if you should apply? We can help.
The first thing to note is that, while SBA 7(a) loans are partially backed by the Small Business Administration, the SBA does not actually give the loan itself. Individual lenders like our wholly-owned subsidiary, Fund-Ex Solutions Group, are the ones that provide the loans to business owners and entrepreneurs like you.
So, in order to qualify and receive funds, you need to meet the requirements of the SBA program you’re interested in as well as your lender’s criteria. Let’s break it down further.
Who can apply for an SBA 7(a) loan?
To be considered eligible for an SBA 7(a) loan, certain requirements must be met:
- The company needs to be a for-profit business
- It must operate or be intended to operate within the US or US-owned territories
- You must have sufficient owner equity to invest in the business
- You must have invested your personal finances or utilized other financing options before applying for the SBA 7(a) loan
- You must have fewer than 1,500 employees and meet the requirements of the SBA to be considered a small business
Examples of business types that may qualify include bakeries, franchises (with restrictions), agricultural companies like farms and fishing vessels (with restrictions), tech start-ups, retail stores, service providers, and more.
Beyond what is required by the SBA to apply for an SBA 7(a) loan, you’ll also have to consider the individual lender’s process, their requirements for approval, and their turnaround time.
For example, compared to other SBA lenders, Fund-Ex Solutions Group provides a streamlined experience. As part of the SBA’s Preferred Lender Program, our wholly-owned subsidiary provides SBA funding to customers with greater speed and flexibility.
Find out more about SBA 7(a) loans by visiting the Fund-Ex Solutions Group website today and speaking to a loan specialist about your eligibility.
And that brings us to our next topic, who should not apply for an SBA 7(a) loan.
Who cannot apply for an SBA 7(a) loan?
While it is possible to apply, the following companies are unlikely to be approved for SBA 7(a) loans:
- Those that are not small businesses
- Those participating in illegal activities or gambling
- Those requiring more than $5 million in financing ($5 million is the maximum funding amount for these loans)
- Those whose business owner is on parole
- Those that are non-profit or government-owned
- Those falling under the category of banks and financial institutions
Now you know who can and who cannot apply for an SBA 7(a) loan. If you have any other questions about your eligibility for our loan solutions, visit the Fund-Ex Solutions Group website here.