SBA 7(a) Loans

SBA Logo for Citizens State Bank Express Lender Program

Citizens State Bank is approved to offer SBA loan products under the SBA’s Express Lender program.

The Small Business Administration (SBA) 7(a) loan program is the most common way the SBA supports small businesses. They’re ideal options for business financing due to their long repayment terms and low interest rates.

Standard 7(a) loans offer up to $5 million in financing and can be used for a wide range of purposes, including:

  • Working capital
  • Equipment purchases
  • Real Estate purchases
  • Construction or renovation
  • Establishing a new business or assisting in the acquisition, operation or expansion of an existing business
  • Refinancing existing business debt

To qualify for 7(a) loan assistance, companies must:

  • Operate for profit
  • Be a “small business” as defined by the SBA
  • Have reasonable invested equity
  • Demonstrate the need for a loan
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligation to the federal government

Some businesses may not qualify for a 7(a) loan, including:

  • Those engaged in illegal activities
  • Multi-sales distribution (pyramid sales plans)
  • Gambling activities
  • Real estate investment firms
  • Firms involved in lending activities
  • Rare coin and stamp dealers
  • Charitable, religious, or other non-profit institutions
  • Consumer and marketing cooperatives
  • Has an owner who is on parole

While your lender will let you know what you need to apply, generally the SBA requires:

  • Your SBA loan application form (Form 1919)
  • A personal financial and background statement
  • Business financial statements and a one-year financial projection statement
  • A list of any business ownerships and affiliations connected to you
  • Your business certificate or license
  • Your loan application history
  • Personal and business tax returns for the past three years
  • Personal resumes for each principal of the business
  • An overview and history of your business
  • A copy of your business lease

If you are buying an existing business, gather the following information:

  • Current balance sheet and profit and loss statement
  • Federal income tax returns for the previous three years
  • Proposed bill of sale including the terms of sale
  • Asking price with schedule of inventory, machinery and equipment, and furniture and fixtures
  • Franchise, jobber, or licensing agreements
  • Proof of equity injection

You may be required to submit more SBA forms based on the specific use of proceeds or fees paid on a loans package or to a broker or agent.

While loan repayment terms can vary:

  • Most 7(a) term loans are repaid with monthly payments of principal and interest
  • Payments stay the same for fixed-rate loans because the interest rate is constant
  • For variable rate loans, the lender can require a different payment amount when the interest rate changes