What to Know About SBA Loans for Your Business

The U.S. SBA offers a range of financing programs and a lender match system designed to expand access to capital for small businesses. These programs are built to support owners at every stage, from startup through expansion, by reducing common barriers associated with traditional financing, such as delays in receiving funds and unfavorable loan terms.

As a result, many business owners choose SBA loans due to several key advantages:

• Greater efficiency. Working with an SBA-Preferred Lender, such as FNB, streamlines access to financing because preferred lenders are authorized to make final credit decisions without additional SBA approval. This can reduce the time it takes to receive funding by several weeks.
• More flexibility. Most SBA loans are backed by the U.S. government for amounts up to $5 million. This mitigates risk and enables lenders to provide financing for businesses that may not qualify for conventional loans. Once approved, an SBA loan is free of operational covenants — ongoing lender requirements that restrict how a business operates, such as limits on spending, staffing or strategic decisions.
• Improved affordability. SBA programs typically offer reduced down payment requirements and extended terms, often 10 years for non-real estate loans, and up to 25 years for real estate loans. This can lower monthly payments and keep more cash available for daily business operations. Because of these longer repayment periods, an SBA loan may offer lower monthly payments than a conventional loan with a comparable interest rate.

How does the SBA 7(a) program support business acquisitions?

The SBA's flagship SBA 7(a) loan program helps businesses finance acquisitions and expansions, as well as support ongoing working capital needs, through flexible loan structures and longer repayment terms. This program is the administration’s most widely used option because of its flexibility. Providing funds up to $5 million with terms up to 25 years, these loans are a strong solution for financing a wide range of expansion opportunities. SBA 7(a) acquisition loans are usually structured to include funds for working capital or new equipment, but can also provide for startup expenses and other essential costs.

As an SBA-Preferred Lender, FNB experts are empowered to get business owners to an appropriate solution as efficiently as possible while providing access to FNB's sophisticated internal resources, expansive network and high-touch consultation.