5 States With The Highest SBA 7(a) Loan Amounts (2023)

FAQs

5 States With The Highest SBA 7(a) Loan Amounts? ›

SBA Loans by State

Texas received a greater number of PPP loans than any other state: more than 134,000 loans as of April 16. California received 113,000 loans. Other states, such as Illinois, New York, and Florida, which have been significantly impacted by COVID-19, also received a large number of loans.

SBA Loans by State

Texas received a greater number of PPP loans than any other state: more than 134,000 loans as of April 16. California received 113,000 loans. Other states, such as Illinois, New York, and Florida, which have been significantly impacted by COVID-19, also received a large number of loans.

Loan amounts

Most 7(a) loans have a maximum loan amount of $5 million. However, SBA Express loans have a maximum loan amount of $500,000. SBA Export Express loans have a maximum loan amount of $500,000. The SBA's maximum exposure is $3.75 million ($4.5 million under the International Trade loan).

SBA 7(a) loans are the most popular type of SBA loan. These loans are federally guaranteed term loans with a maximum loan amount of $5 million. Business owners often use SBA 7(a) loans to finance working capital needs, buy an existing business, refinance debt, or purchase new equipment.

Although the guarantee incentives lenders to work with small businesses, it can still be hard to qualify for SBA 7(a) loans. Lenders generally require a good personal credit score (690+), two or more years in business, and strong annual revenue for 7(a) loan applications.

The SBA does not originate business loans.

Instead, the agency guarantees a portion of loans offered by partner banks, credit unions, non-profits, and other financial institutions.

Which states got the most PPP loans? California received the highest number of loans in 2021, with some 692,692 businesses funded by the PPP. Florida followed with 598,506 businesses that received PPP loans. Texas came in third with 559,159 businesses funded and Illinois pulled in fourth with 435,736 PPP loans.

[A]n applicant for a business loan under section 7(a) or an applicant for a development company loan under title V of the Small Business Investment Act of 1958 may be eligible for such a loan if— (i) the maximum tangible net worth of the applicant is not more than $15,000,000; and (ii) the average net income after ...

The SBA 7(a) loan programs don't require collateral, but individual banks may have their own requirements. Buildings, equipment, and land are all possible types of collateral that you can offer.

In order for your practice to meet the eligibility requirements for a SBA 7a Loan, it must be for-profit and located in the United States with a net worth less than $15 Million and/or net income after taxes of less than $5 Million.

What is the easiest SBA loan to get? ›

SBA Express

This term loan or line of credit offers fixed or variable SBA loan rates as well as the easiest SBA application process, quick approval times, flexible terms, and lower down payment requirements than conventional loans.

SBA 7(a) Rates

Funds can be used to cover working capital, equipment purchases and the cost of business expansion. Loans may come with either variable or fixed rates.

The 7(a) Loan Program, SBA's most common loan program, includes financial help for small businesses with special requirements. This is a good option when real estate is part of a business purchase, but it can also be used for: Short- and long-term working capital. Refinancing current business debt.

An SBA 7(a) loan can take time to move through approval -- typically, 60-90 days. In addition, if your lender is an SBA Preferred lender, they will have the authority to approve your loan much faster than a non-preferred lender.

Only about 1 in 6 SBA 7(a) loans are not paid back. Owners defaulting on their loans may want to try applying for SBA loan forgiveness to lessen their debts. Learn all about the SBA loan forgiveness program and how it works below.

How long does the SBA 7(a) loan approval process take? The SBA 7(a) loan approval process can take between 7-10 business days if you are using the Standard 7(a) Loan Processing. If you are using the Certified Lenders Program (CLP) Processing, the process can be expedited and only take 3 business days.

1. Live Oak Bank. The biggest SBA 7(a) lender of 2022 is Live Oak Bank.

Who is the top SBA lender? As of April 2023, Live Oak Bank is the top SBA lender based on loan approval amount. The bank has approved almost $900 million in 7(a) loans for the 2023 fiscal year.

In order to be approved for SBA lending, at least 51 percent of the business must be owned by a U.S. Citizen (or citizens) or Green Card holder. The SBA will approve funding for businesses with foreign investors, but the maximum is 49 percent ownership for non-citizens.

Construction businesses with fewer than 500 employees secured the most money overall, receiving nearly $98 billion in PPP loans. The healthcare and social assistance industry and professional, scientific, and technical industry were not far behind, receiving roughly $96 billion and $94 billion, respectively.

What banks processed the most PPP loans? ›

SBA 7(a) loans can be used for various purposes, including purchasing real estate, equipment, working capital, refinancing debt, and, of course, buying a business.

Individuals who own 20% or more of a small business applicant must provide an unlimited personal guaranty. SBA Lenders may use this form.

SBA 504 loans are typically larger loans in dollar amounts lent. Businesses can borrow from $125,000 up to $10 million, depending on the business's qualifications and needs. 7a loans, meanwhile, offer smaller dollar amounts, with the maximum loan topping off at $5 million dollars.

Do SBA loans require a downpayment? Yes, the minimum SBA loan down payment requirement is 10% on 7(a) and 504 loans and is based on a business's cash flow and collateral. Weak cash flow or low-value collateral can increase the down payment requirement to up to 30% of the loan amount.

7(a) Repayment Terms

Balloon payments or call provisions are not allowed on any 7(a) loan except SBA Express loans.

They'll consider household income, business revenue, cash flow, outstanding debt, unused credit lines, and the amount of money the owner has personally invested into the business. All these variables will help lenders calculate the ability for an owner to repay the loan.

SBA loans have a 49% approval rate at small banks. SBA loans only have a 25% approval rate at large banks. 33% of small business owners struggle or fail due to a lack of capital.

SBA was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns; preserve free competitive enterprise; and maintain and strengthen the overall economy of our nation.

How many employees do you need for SBA loan? ›

Eligible business criteria

Generally, in the eyes of the SBA, you're a small business if you meet the following criteria: Your team consists of between 50 – 1,500 employees. You have between one million to $41.5 million in annual receipts.

While there's no official required SBA loan credit score from the Small Business Administration, lenders will often set minimum personal and business credit score requirements for SBA loan applicants. An SBSS of 140 to 160+ or a personal score of 620 to 640+ are commonly needed to qualify.

The minimum credit score required for an SBA loan depends on the type of loan. For SBA Microloans, the minimum credit score is typically between 620-640. For SBA 7(a) loans, the minimum credit score is typically 640, but borrowers may find greater success if they can boost their credit score into the 680+ range.

They take into consideration many factors such as the time for which you have been in operation, credit scores, the monthly revenue you earn, your business plan, and the collateral you can provide, among others. If you're unable to meet their conditions, they may not offer you the finance you need.

The short answer – No, it is not hard to get an SBA loan! Most businesses are eligible and qualifying is easier than you might think! The SBA 504 loan is specifically designed to help small businesses expand by purchasing fixed assets such as real estate and equipment.

In the case of SBA 7(a) and Community Advantage loans, you won't get your loan disbursement in one big check, but rather in “controlled disbursements.” Lenders choose to disburse business loan funds in pieces because it keeps you accountable for how you use the funding.

That means your tax liability will not increase due to receiving an SBA loan. In fact, in most cases, you may even be able to write off interest paid on your loan as a deduction on your tax return (something we'll explore in-depth a little later). The only time a loan will be taxed is if it is forgiven.

SBA Express loans are business loans that fall within the SBA's 7(a) loan program. This type of SBA loan can be used for a range of business purposes, including working capital or the purchase of equipment, real estate or an existing business.

You can only use SBA loans for "sound business expenses." That means you cannot use an SBA loan for personal expenses, such as personal credit card bills, your home mortgage, or student loans.

After an SBA loan is approved, it usually takes around five days for the lender to disburse loan funds—but it can take up to 14 days. That said, the actual amount of time it takes for you to receive loan proceeds depends on the lender and the business' bank.

How long do you have to be in business to qualify for a SBA loan? ›

The SBA 7(a) and 504 loan programs typically require good personal credit (a FICO score of 690 or above), solid business financials and at least two years in business.

What Happens if You Can't Pay Your SBA Loan Installments? If you can't make your SBA loan payments, you won't just be in trouble with your lender. The SBA will get involved and, when you still can't pay your debt, they'll transfer your account to the US Department of the Treasury.

If business assets do not fully secure the loan, the lender must take available personal assets of the owners as collateral. This more often than not includes your personal real estate, including your home.

As you know it is a federal offense, so federal penalties are charges for SBA loan fraud. Fine and punishment both are charged if you committed mail and wire fraud. It means around 20 years in federal prison along with a fine.

Maturity Terms for the SBA 7(a) Loan

The maximum maturity for an SBA 7(a) loan is 25 years, regardless of the purpose or amount. For loans used to buy real estate or land, the maturity is up to 25 years. Equipment loans, or loans used for working capital or inventory, have a payment length of up to 10 years.

FEEA offers eligible federal employees confidential, no-interest loans to help them bridge their financial gaps in times of emergency. FEEA has given over 13,000 no-fee, no-interest loans since 1986, to help feds make ends meet during personal tragedies like illness, death of a loved one, or a house fire.

The average SBA loan is $417,316, while the maximum loan amount is $5 million. SBA loans have a 49% approval rate at small banks. SBA loans only have a 25% approval rate at large banks.

8 by the Small Business Administration found that 92% of the loans issued have been granted full or partial forgiveness. That includes loans to companies with mega-rich owners.

In FY 2021, the 7(a) loan program had a default rate of 1.02 percent and a charge-off rate of 0.15 percent. These rates are significantly lower than the FY 2018 default rate of 9.04 percent and charge-off rate of 4.75 percent.

Are SBA loans difficult to get? ›

The short answer – No, it is not hard to get an SBA loan! Most businesses are eligible and qualifying is easier than you might think! The SBA 504 loan is specifically designed to help small businesses expand by purchasing fixed assets such as real estate and equipment.

While the SBA will not forgive 100% of the debt owed, the goal is to settle on a number that makes sense for both the agency's bottom line and a business's financial ability to pay. If the SBA approves the offer in compromise, a payment will be issued and the loan will be classified as “Compromised/Closed.”

If, or when, the business closes and defaults on the loan the SBA will move to seize business assets. For example, if your business owns a building, heavy machinery, or vehicles, the government will seek to seize these assets to satisfy the outstanding debt.

SBA loans are granted to small businesses to expand their operations via long- or short-term capital, asset purchases, or startup expenses. Small businesses receive loans from SBA partner lenders and the borrower is obligated to pay this lender back.

Yes, a non-U.S. citizen can apply for an SBA loan.

Yes, Canadians can obtain a mortgage in the United States. Many Canadians take advantage of the lower interest rates and longer loan terms available in the United States to purchase vacation homes or investment properties.

Yes, you can be a non-U.S. citizen and get a personal loan as long as you can prove your residency status and meet the lender's eligibility requirement.

They can be used for a variety of business purposes including working capital, equipment acquisition, debt refinance, change of ownership, and real estate purchases. Maturities depend on the use of loan proceeds but typically range from 5 to 25 years.

Average SBA loan amounts

According to the 7(a) and 504 Summary Report from the SBA, the average loan amount during the 2022 fiscal year for all types of 7(a) loans was $538,903.