SBA Loans FAQ

Get answers to frequently asked questions about SBA loans.

Questions about SBA loans? We have answers.

What is the SBA?

The Small Business Administration (SBA) is an independent agency of the U.S. government that helps small businesses grow and succeed, ultimately benefiting small towns, big cities, and our nation’s economy. The SBA provides a range of services to startups and established businesses. These include business loans, business counseling, startup assistance, and mentor programs from other entrepreneurs.

What is an SBA loan?

This government-backed business loan is designed to help businesses in the United States start, grow, and expand. The Small Business Administration does not provide the funding. Instead, it works with approved banks and financial institutions that issue the funding. Different programs are available based on the company’s particular needs. These are often used to start a new business, expand an existing one, or purchase capital equipment, machinery, and other goods needed for their business operations.

Why should I apply for an SBA loan?

This type of loan has high borrowing amounts, low annual percentage rates (APRs), and longer repayment terms. Having predictable, manageable payments can help you manage your cash flow for ongoing business expenses. Plus, you can spend less money on debt repayment.

What types of SBA loans does Balboa Capital offer?

Balboa Capital currently offers SBA 7(a) loans from $400,000 to $5 million for capital equipment, working capital, and real estate acquisition. SBA 7(a) loans can also be used to launch a startup, expand an existing business, or acquire a company. Balboa Capital also offers SBA 504 loans from $400,000 to $5 million for certain long-term fixed assets that “promote business growth and job creation,” according to the SBA. These may include machinery or large equipment. SBA 504 loans can also be used to purchase commercial real estate or land, new business facilities, expand existing operations, and make property improvements.

What are the repayment terms?

Good question! The maximum repayment terms for SBA 7(s) loans are 10 years for capital equipment, 10 years for working capital, and 25 years for real estate acquisition. SBA 504 loans have 10 and 25-year maturity terms.

What are the interest rates?

Variable and fixed rates are available for SBA 7(a) loans, and fixed rates are available for SBA 504 loans. Variable interest rates can fluctuate based on the base rate, such as the current prime rate, which is made available to the public. Fixed interest rates for the entire term are tied to the current 5-year and 10-year United States Treasury rates, which are also available to the public.

How can I qualify for an SBA loan?

To qualify, your business must meet the Small Business Administration and Balboa Capital eligibility requirements. For example, your business needs to operate for profit in an eligible industry, have strong financials, and be physically located in the United States. In addition, your credit score, time in business, and company size will also play a part in the qualification process. A Balboa Capital business development manager will discuss the complete list of qualifications with you.

How do I apply?

The application process can seem overwhelming because it requires a lot of time and documentation. The good news? We will assist you throughout the process so you can complete your application package promptly and focus on what’s most important: running your business. A Balboa Capital business development manager will provide you with one-on-one application assistance. This individual will provide you with a checklist of necessary documents and forms, ensure that everything is filled out correctly, and answer any questions you have.

Do I need a business plan?

Yes. A business plan is one of the necessary documents that is included in your loan application package. There are many additional documents required, and your Balboa Capital account manager will go over the list with you, so you are well-informed.

Do I need to personally guarantee the loan?

Anyone who owns 20% or more of the business applying must sign a personal guarantee. A signed personal guarantee gives Balboa Capital the authority to seize personal assets if the business defaults on the loan and the business’s assets cannot cover the loan payments.

How long does it take to get funding?

There is no “one-size-fits-all” timeline for SBA loans because some requests are larger and more complicated than others, and every business’s situation is unique. The timeline also depends on how soon you can provide the necessary documents for your loan package. That being said, most requests take close to 90 days to complete.

Why should I choose Balboa Capital?

Balboa Capital is a division of Ameris Bank, a financial institution headquartered in Atlanta, Georgia, that is an SBA Preferred Lender. Balboa Capital has an A+ rating with the Better Business Bureau (BBB), hundreds of verified five-star customer reviews online, and one of the highest Net Promoter Scores (NPS) in the U.S. financial services industry.