How to Use SBA 7a and 504 Loans to Fuel Your Business Dreams – Josh Kim


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We help small business owners find financing through SBA lenders. The SBA is the U.S. Small Business Administration that was formed to make it easier for small businesses to access capital and business opportunities. The two primary financing options they offer are the 7a and 504 loan programs. The first misconception I want to clear up is you don’t get a loan from the SBA but individual banks that participate in the program. The SBA acts as the insurer on the loan and backs up to 75% of the loan value.

Two general rules of thumb must be true to be eligible for an SBA loan, you must be a for-profit business and incorporated in the United States. The value we add for our clients is to help accelerate the process by guiding them on how to prepare the loan application and pairing them with a suitable bank. When it comes to the size of loans available, the 504 program offers up to $10 million for real estate and the 7a program is up to $5 million to buy a business or obtain working capital.

The money from an SBA loan can be used in several ways. For example, you could use it to purchase a business, purchase real estate, buy out a partner, pay off more expensive debt, pay wages for new employees, or general working capital needs. Now is still a great time to get an SBA loan because interest rates are still near historic lows.

While most business owners are great at what they do, raising capital is a bit of an unknown area. I would challenge anyone who says there is a better place for small businesses to get capital than an SBA loan. A lot of other countries offer small business loan programs but none come close to the value the SBA brings to the table. If you’re interested in learning more about getting an SBA loan head over to our website at and book a consultation call.

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