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SBA Guaranteed (7a) Loan Information
SBA's Function:
Lending partner to participating financial institutions.
Maximum Size Standard:
Manufacturing - 500 to 1500 employees.
Retailing - $5 to $21 million annual receipts.
Construction - $5 to $27.5 million annual receipts.
Service - $3.5 to $25 million annual receipts.
SBA Guaranty:
80% through $100,000 - 75% over $100,000.
Interest Rates:
Prime plus 2-1/4% for 7 year loan or less.
Prime plus 2-3/4% for over 7 year loan.
Maximum Terms:
Land and Buildings - 25 years.
Machinery and Equipment - 10 years.
Furniture and Fixtures - 10 years.
Inventory - 7 years.
Working Capital - 7 years.
SBA Guaranty Fee:
Guaranty Fee ranges from 1/4 of one per cent to 3-7/8% depending on amount guaranteed and maturity of the loan. Check with SBA for current rates/fees. (205) 731-1344.
Cost to Borrower:
SBA Guaranty fee, closing costs, appraisal, accounting fees, loan preparation fees, etc. Required to use bank appointed attorney.
For Start Up Business:
Generally, injection of 20-30%
Personal Guaranty Requirements:
All principals with 20% or more ownership must sign personal guarantee.
For more information:
Call the U.S. Small Business Administration at (205) 290-7101 or visit the website at http://www.sbaonline.sba.gov
Next section: Basic Requirements for SBA (7a) Loan Program