SBA Loans Comparison Chart

For-profit businesses

Small business qualification by SBA guidelines

Size varies by industry type

Same as 7(a) Term Loan

Same as 7(a) Term Loan

Existing, for-profit businesses

Net worth $6MM or less, net profits after taxes $2MM or less

1 job created for every $50,000 in SBA loan funds

SBA loan guarantee can not exceed $1,500,000

Loan ceiling of $2,000,000

From $100,000 to $250,000

From $100,000 to $250,000

From $150,000 to $3,000,000 ($2,500,000 for special purpose real estate)

Maximum SBA loan $1,000,000 ($1,300,000 in rural areas or for manufacturing companies)

– Land
– Buildings
– Machinery & Equipment
– Purchase Business
– Inventory
– Working Capital

Same as 7(a) Term Loan

Same as 7(a) Term Loan

– Land
– Buildings (new purchase, new construction or renovation)
– Machinery & Equipment (minimum useful life of 10 years)

Provided by bank, and SBA provides an 85% guarantee to bank on loan amounts of $150,000 or less, 75% guarantee on loan amounts of $150,000 or more

SBA provides an 85% guarantee to bank

Provided by bank, and SBA provides a 50% guarantee

50% financed by bank

40% SBA loan through Certified Development Co.

10% borrower injection (increased injection required on new businesses or special-purpose real estate)

SBA requires bank to take a secured interest in business assets and/or a mortgage on real estate

Same as 7(a) Term Loan

Same as 7(a) Term Loan

Bank holds first mortgage on real estate, and/or secured interest in equipment and machinery. SBA holds second mortgage on real estate, or second secured interest in equipment and machinery

– Personal guaranties by all owners of 20% or more
– Adequate business collateral, or personal assets securing personal guaranty – example: mortgage on home
– Hazard Insurance

Same as 7(a) Term Loan

Same as 7(a) Term Loan

– Personal guaranties by all owners of 20% or more
– Life insurance on business principals in amount of SBA loan
–Hazard Insurance

– Working Capital — up to 7 years
– Equipment — up to 10 years (or useful life)
– Real Estate - up to 25 years

Same as 7(a) Term Loan

– Term loan
– up to 5 years

– Bamk loan – minimum 10 years on Real Estate; 7 years on Machinery & Equipment
– SBA loan – 20 years

– Rates can be fixed or variable
– NY Prime + 2.25% - term less than 7 years
– NY Prime + 2.75% term greater than 7 years

Same as 7(a) Term Loan

– NY Prime + 4.5%

– Bank loan–negotiated rate between borrower and Bank (fixed or variable)
– SBA loan – below market fixed interest payment , loan rate set when debenture is sold