This SBA program offers the most flexible and longest-term loans. The loan may be used for everything from start-up businesses to real estate to equipment and working capital investments.
- Terms of up to 25 years and lower payment
- Competitive rates and no balloon payments
- Loan proceeds can be used for many purposes
Download Highland Bank’s SBA Loans Comparison Chart
SBA 7(a) Program Guidelines
Eligibility
- For-profit business
- Must qualify as a small business according to SBA Size Guidelines (varies by industry type).
Loan Size
- Maximum SBA loan is $5 Million
- Maximum SBA guaranteed portion is $3.5 Million
Financing
- Provided by Highland Bank SBA provides an 85% guaranty to Highland Bank on loan amounts up to $150,000
- SBA provides a 75% guaranty to Highland Bank on loans exceeding $150,000
Use of Proceeds
- Land
- Buildings
- Equipment
- Furniture & Fixtures
- Inventory
- Business Acquisition
- Working Capital
Collateral
- SBA requires that Highland Bank take a first secured interest in business assets and/or a mortgage on real estate.
Loan Terms
- Working Capital – up to 7 years
- Equipment – up to 10 years (or useful life)
- Real Estate – up to 25 years
SBA Guaranty Fee
- SBA charges a 2% fee on the guaranteed portion of loans $150,000 or less
- SBA charges a 3% fee on the guaranteed portion of loans over $150,000 up to $700,000
- SBA charges a 3.5% fee on loans over $700,000
Interest Rate Spreads
- Rates can be fixed or variable. Maximum spread:For terms up to 7 years – WSJ Prime + 2.25%For terms 7 years and greater – WSJ Prime + 2.75% Additional 1% may be charged on loans between $25,000 and $50,000
- Additional 2% may be charged on loans under $25,000
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