Quick Introduction to SBA

“Created in 1953, the U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs pursue the American dream. SBA works to ignite change and spark action so small businesses can confidently start, grow, expand, or recover. They do this through providing counseling, capital, and contracting expertise.” CrossFirst Bank has a team of dedicated full-time bankers who focus on providing extraordinary service to SBA clients. In fact - CrossFirst Bank is proud to be an SBA Preferred Lender. Under the SBA Preferred Lenders Program (PLP), CrossFirst Bank has been delegated authority by the SBA to approve loans, resulting in faster service to local small business owners in need of capital. With this lending authority, SBA has authorized CrossFirst Bank to make the credit decision without prior SBA review on many types of loans. The loan process is especially streamlined if it is under $5 million.

In this blog, we’re going to go over the two types of SBA loans that are available at CrossFirst Bank.

7(a) Loans

The most common SBA program is the 7(a) program.  7(a) loans are originated by a participating lender and SBA guarantees a portion of the total amount. The small business benefits from more favorable terms including, long-term fully amortizing loans, lower down payments, favorable interest rates, and limited fees. Certain lenders are given approval by SBA to approve, process, and close these loans on SBA’s behalf. This is known as the Preferred Lender Program or PLP.

According to the SBA, “This is a good option when real estate is part of a business purchase, but it can also be used for: 

  • Purchasing owner-occupied commercial real estate
  • Constructing or renovating owner-occupied commercial real estate
  • Buying a business
  • Expanding a business to a 2nd or 3rd location
  • Purchasing machinery and equipment
  • Purchasing furniture, fixtures, and supplies 
  • Short and long-term working capital
  • Refinancing current business debt

The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates.

To be eligible for 7(a) loan assistance, businesses must:
  • Operate for profit 
  • Be considered a small business, as defined by SBA 
  • Be engaged in, or propose to do business in, the United States or a US Territory 
  • Be able to demonstrate a need for a loan 
  • Use the funds for a sound business purpose 
  • Not be delinquent on any existing debt obligations to the U.S. government 
  • Be creditworthy and reasonably assure repayment of the loan”

To learn if a 7 (a) SBA loan may be the right fit for your business, reach out to one of our CrossFirst Bank SBA bankers today.

504 Loans

504 loans are long-term, fixed-rate loans used to purchase or renovate real estate, equipment, machinery, or other long-term assets.

The maximum loan amount for a 504 loan is $5.5 million. For certain energy projects, the borrower can receive a 504 loan for up to $5.5 million per project, for up to three projects not to exceed $16.5 million total. Since the 504 loan is a subordinate debenture to senior bank financing, 504 total projects can be as large as $20MM+.

To be eligible for a 504 loan, your business must: 
  • Operate as a for-profit company in the United States or its possessions
  • Have a tangible net worth of less than  $15 million
  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application.

If you think a 504 SBA loan might be a good fit, send our CrossFirst Bank SBA bankers a message and we’ll walk you the process.

Note About Microloans and CrossFirst Bank

The third type of SBA loan is a microloan. CrossFirst Bank does not offer SBA microloans. However, we do offer other small business lending options through the CrossFirst Bank ProSuiteTM, including streamlined options for needs less than $150,000.

Let’s Get Started!

CrossFirst Bank would be honored to be your SBA provider. Since 2007, we’ve been committed to serving our communities in extraordinary ways through unparalleled service. To learn more, reach out to one of our SBA bankers today!