SBA 7(a) Financing 

Types of Financing 

  • Acquisition  / Purchases
  • Construction  / Improvements
  • Expansion  
  • Refinance  
  • Start-Up  (Business without financials)

Loan Amounts:       $100,000-$5,000,000

Terms:                   7, 10, 25 Years (depending if working capital, business only or real estate)

Interest Rate:        Prime + .0% -2.75% (Varies by credit risk)

Loan To Value:       50 - 90%

Prepay Penalties:   1st Year 5%, 2nd Year 3%, 3rd Year 1%


  • None to minimal lender fees   
  • Due Diligence Deposit  (Appraisal, Environmental, Title work)
  • Customary closing costs  
  • Construction fee, if applicable, to offset monitoring costs  
  • SBA charges a fee of approximately 3.5% (depending on loan amount and percentage of guarantee, usually 75%)  This is 3.5% of the guaranteed PORTION, not 3.5% of the loan.


  • Owner occupied small business  (No investment properties)
  • US Citizen or permanent resident alien status  
  • Good credit/character  
  • Management experience  (preferably direct industry experience)
  • Reasonable financial statement or credible projections  
  • Business must meet SBA size standards  

Collateral: First lien on land, building, equipment and inventory Additional outside collateral is necessary if lease-hold improvements are substantial.

Quick Response Loan decision generally made within 3 weeks of receipt of completed application. SBA remains the predominant means of financing auto repair shops and auto body shops in the country. The reasons are clear. Because SBA provides longer amortization periods and usually transactions can be approved with smaller debt service coverage, each finance dollar provides approximately 25% more in loan amount, making it easier for borrowers to qualify than for conventional financing. It is a misconception that SBA financing takes longer than conventional financing or that you have to be turned down for a conventional loan to be considered for SBA financing. Generally the speed of the approval is in direct proportion to the organization of the loan package that has been submitted. Recently, SBA has placed more emphasis on the prior experience of the borrower. If you do not have experience in auto repair or auto body shops, it will be necessary to either bring in a partner with direct management experience, retain the seller (if a purchase) in a management capacity for a period of time and/or perhaps attending training courses. Also important to note is that the borrower's equity infusion needs to be documented. If you are borrowing money from a third party or are using a home equity loan as part of your equity infusion, SBA would also consider this as a loan and the transaction would be underwritten to service two separate debts.

To prequalify for financing, download the following forms and provide the following information and fax to (202)478-1811 or email to




















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