SBA 7(a) STARTUPS PROGRAM - Advance Capital

SBA 7(a) Startups Program

SBA 7(a) loans are available to both startups and more established small businesses. To qualify for an SBA 7(a) loan, you will generally need to meet these minimum requirements:

  • Credit Score:  680+
  • Other Requirements: No recent bankruptcies, foreclosures, or tax liens
  • Collateral: While the SBA will not refuse to guarantee a loan due to insufficient collateral, a lender is less likely to approve a loan that isn’t backed by sufficient collateral.
  • Down Payment: 10%+ down payment if you are using the loan to purchase a business, commercial real estate, or equipment

Startups will need to not only meet the above requirements but they’ll also need to show the lender that they have sufficient industry or business management experience and provide a strong business plan. Your business plan will need to have a detailed written analysis, and you’ll need to also to provide financial projections for your business’s performance over the next 3-5 years.

In our experience, it is very difficult for anyone other than the best borrowers (700+ credit score, high net worth, real estate with significant equity) to get approved for an SBA loan as a startup.

Perhaps the largest hurdle for startups is that most SBA lenders will require an equity injection or down payment of at least a 20-30% of your total project costs ($20-$30 for every $100 you want to borrow). That can be a lot for many entrepreneurs. We can help startups put together their SBA loan applications, find lenders most likely to work with you, and find creative ways to meet the down payment requirements.

In addition to the credit requirements listed above, the SBA also has other eligibility requirements. These requirements include being defined as a small business and being able to demonstrate the need for the loan proceeds.

If you’ve been in business for 2+ years, have a 680+ credit score, and are profitable then you could qualify for an SBA 7a loan