SBA Lending
Financing Solutions for Small Businesses
- SBA 7(a) Loan Program
- SBA 504 Loan Program
The Small Business Administration (SBA) serves as the main resource for government-backed business loans. Because a portion of an SBA loan is guaranteed by the government, these loans allow small business owners to obtain capital with less equity than a conventional loan requires.
- Business Expansion
- Commercial Real Estate
- Construction
- Business Acquisition
- Business Startup
- Working Capital
- Business Debt Refinance
- Equipment Financing
- Full or Partial Owner Buyout
SBA 504 Loan vs. SBA 7(a) Loan
| Feature | SBA 504 | SBA 7(a) |
|---|---|---|
| Primary purpose | Financing for owner-occupied commercial real estate and eligible long-life equipment. | Flexible financing for business purposes, including working capital, real estate, equipment, and business acquisition. |
| Maximum loan size | SBA debenture portion generally up to $5.5 million, with total project costs often exceeding that amount. | Up to $5 million. |
| Typical repayment term | Up to 25 years for real estate and up to 10 years for eligible equipment. | Up to 25 years for real estate and up to 10 years for certain equipment or working capital uses. |
| Rate structure | Fixed-rate structure on the SBA debenture portion for the life of the loan. | Variable or fixed, depending on lender structure and program terms. |
| Equity injection | Often 10%, with higher equity requirements possible for startups or special-use properties. | Often 10% to 20%, depending on lender, transaction type, and credit profile. |
| Common use case | Businesses seeking long-term fixed financing for owner-occupied real estate or equipment acquisition. | Businesses seeking broader financing flexibility for expansion, acquisition, or operating needs. |
Small Business Loans
Whether your goal is to acquire, construct, or expand commercial real estate for your business, or meet other financial goals, we have the expertise and reliability to deliver.
Detailed Comparison of SBA 504 & SBA 7(a) Loan
| Feature | SBA 504 Loan Program | SBA 7(a) Loan Program |
|---|---|---|
| Primary use | Financing for owner-occupied commercial real estate and eligible long-life equipment. | Flexible business financing for real estate, equipment, working capital, and business acquisition. |
| Typical loan size | Commonly used for projects where the SBA debenture portion may reach up to $5 million or $5.5 million in certain cases, while total project size can be larger. | Up to $5 million, subject to SBA program limits and lender structure. |
| Rate structure | The SBA debenture component is generally fixed for the life of the loan and fully amortizing. | Commonly variable, with some fixed-rate options depending on lender execution and SBA program parameters. |
| Business size eligibility | Subject to SBA 504 size standards, including tangible net worth and average net income thresholds. | Subject to SBA small business size standards, typically based on revenue or employee count by industry. |
| Repayment term | Up to 25 years for real estate and up to 10 years for eligible equipment, generally with full amortization. | Up to 25 years for real estate and up to 10 years for many equipment or acquisition uses, with shorter terms often applied to working capital. |
| Capital structure | Commonly structured with a bank first mortgage, a CDC/SBA second mortgage, and a borrower equity injection. | Structured through one participating lender, with equity requirements varying by lender, use of proceeds, and credit profile. |
| Eligible uses | Acquisition, construction, expansion, or improvement of owner-occupied commercial real estate, plus eligible equipment with a useful life of at least 10 years. | Real estate acquisition, business acquisition, equipment, leasehold improvements, inventory, refinancing in eligible cases, and working capital. |
| Occupancy and use requirements | Generally requires majority owner occupancy for real estate and direct business use of financed assets. | For owner-occupied real estate, generally requires majority occupancy and a direct business purpose for financed assets. |
| Collateral and guaranty | Typically secured by project assets, with personal guaranties commonly required from principal owners. | Typically secured by available business assets and, in some cases, additional collateral support, with personal guaranties commonly required from principal owners. |
| Program and closing fees | Includes CDC and SBA-related fees, some of which are commonly financed, plus lender and closing costs. | Includes guaranty fees where applicable, lender fees, and closing costs, with structure varying by loan size and transaction profile. |
Streamlined SBA Loan Process
Government Guaranteed Loans provided through the Small Business Administration (SBA) and the United States Department of Agriculture (USDA) are a time-tested and affordable way to fund the growth of new and established businesses. Working with INSIGNIA Financial Services, you can rest assured your financing is being handled by professionals with a demonstrated track record of working with small business lending, proficiency in underwriting, and a commitment to serving small business owners.
We work closely with every client, carefully reviewing their financing needs to determine the best source and type of financing for their objectives. We patiently guide our clients through the lending process, from the application process to funding of the loan and beyond.
SBA 504 Loan Program
The SBA 504 Loan Program provides growing businesses with long-term, fixed-rate financing for major purchases such as commercial real estate and heavy machinery & equipment. This program is designed for small businesses requiring commercial mortgage financing and is facilitated through Certified Development Companies (CDCs). We work closely with CDCs and the SBA to provide financing with a low minimum equity contribution, allowing for the conservation of working capital.
SBA 7(a) Loan Program
The SBA 7(a) Program provides guaranteed financing for a variety of business purposes. The specific business-related expenses covered include working capital, machinery & equipment, furniture & fixtures, land & buildings (including purchase, renovation and new construction), leasehold improvements, and qualified debt refinancing. The SBA 7(a) Program will also help preserve working capital as a result of low down payment requirements.
Healthcare Property Financing
Our Healthcare finance platform offers permanent, non-recourse, assisted living, memory care and intermediate/ skilled nursing facility loans that are designed to give you more of what you need — lower equity requirements and a flexible lending program that meets your unique financing goals. in addition to SBA guaranteed loans, HUD/FHA and USDA guaranteed loans are available for eligible transactions.
Franchise Financing
We offer the franchise financing that helps entrepreneurs succeed. We are focused on the needs and challenges of both new and existing franchisees and provide fast financing for everything from new stores to business acquisition. While the process of applying for franchise financing can be detailed and somewhat overwhelming, our lending specialists provide the expertise and guidance that will make the entire experience a smooth and efficient one.
Medical Practice Financing
Our lending team consists of specialists who are adept at supporting medical professionals in need of customized medical practice financing solutions. We work closely with you to review your needs - whether it’s to start a practice, refinance a practice, expand or relocate, acquire a new practice or finance major equipment for a practice. Then we will develop a customized solution, and assist you through every step of your loan application. Click here for additional information.
Discuss your needs with an expert
What are the requirements?
In general, SBA loans are designed for project amounts up to $20MM. SBA loans can include acquisition of commercial real estate, renovation of the commercial real estate, new construction, and/or heavy equipment. SBA loans typically involve a first lien on the commercial property a down payment contribution, commonly referred to as an “equity injection”, typically of 10%, from the Borrower. SBA loans for commercial real estate properties require a minimum of 51% owner-occupancy. INSIGNIA Financial Services offers exceptional customer service allowing for 24-hour pre-approvals and quick closings – often within 60 days.
Eligible Borrowers
For-profit, non-publicly traded businesses
Tangible business net worth (including affiliates) not to exceed $15MM
Average net income of the business not to exceed $5MM over the previous two years
Ownership must generally be comprised of 51% U.S. citizens or Legal Permanent Residents
Medical offices or medical facilities (such as labs and clinics)
Office buildings (including office condos)
Warehouses (and other industrial properties)
Day care facilities (for children or adults)
Free-standing restaurants
Limited-service, flagged hotels (some unflagged destination hotels will be considered)
Auto repair shops
Self-storage facilities
Assisted-living facilities
Call to ask about many other property types that are eligible
Non-profits (except sheltered workshops)
Passive holders of real estate and/or personal property
Lending institutions (mortgage brokers and correspondent lenders are eligible)
Life insurance companies (franchised agents are eligible)
Businesses located in a foreign country
Gambling concerns
Businesses which restrict patronage
Government owned entities (excluding Native American tribes)
Consumer and marketing cooperatives (producer cooperatives are eligible)
Businesses engaged in SBA loan packaging
Businesses that have previously defaulted on a Federal loan
Businesses engaged in political or lobbying activities
The lending professionals of INSIGNIA Financial Services have extensive experience originating, structuring, and closing SBA 7(a) and SBA 504 loans. We share an entrepreneurial spirit with our clients and understand the needs of small businesses and their owners. We work closely with our clients to provide the necessary capital to support the growth and prosperity or their business.
Contact Us
The team at INSIGNIA Financial Services is available to discuss your financing needs and answer any questions you may have.
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