(917) 593-5013
Small Business Administration (SBA) loans help business owners like you reach the next level of success by getting you the funding needed for growth.
We know the application process may seem daunting. For that and other reasons, you might want to know what the easiest SBA loan to get approved for is.
The straightforward answer: the SBA 7(a) loan program. And it is even easier to get 7(a) working capital loans for less than $500K. Both the 7(a) and 504 loan programs have significant benefits, but the 7(a) is generally easier for applicants to secure.
SBA 7(a) Loan Approval
The 7(a) loan is the most popular SBA loan program. It is easier to get a 7(a) loan approved because the loan program covers a wide range of purposes and industries, and you only work with one lender to get the loan funded, Whereas the 504 program requires you to work with a bank and a Community Development Companies (CDC).
As the more versatile of the loan programs, a small business could utilize 7(a) loan funding for purposes like:
- Marketing
- Hiring
- Refinancing debt
- Purchasing inventory
- Acquiring a business
- Any legitimate business purpose
In loans less than $500k, there is the most flexibility to use the money as needed, without having to decide on the specific use of proceeds in advance of getting the loan.
With the 7(a) loan program, the requirements tend to be less stringent as lenders are more willing to be flexible, especially with lower value loans. 7(a) loans are capped at $5M.
For example, as a business owner you may want to invest some money in marketing, then hire one or two additional employees over the next 6 months, or even just have some cash on hand to take advantage of opportunities and or future crises – an SBA 7(a) working capital loan is perfect!
Another example, an e-commerce business owner may want an SBA loan to reduce the business’s per-unit costs. Securing an SBA 7(a) loan could give them the funding they need to purchase inventory in bulk to meet their profit goal.
Why Is It Harder to Get a 504 Loan?
The SBA 504 loan could be harder to get because you have to deal with multiple funding entities and use of funds is more restrictive.
Businesses may not use funds from a 504 loan for just any purpose. The program offers fixed-rate funding to be used for fixed assets like real estate or equipment. For SBA 504 loans, a down payment of 10% is required, which could create a barrier for some applicants. However, the option of fixed rates and the opportunity to borrow up to $20M+ is very attractive.
The funding for a 504 loan comes from two entities: a traditional lender and a Certified Development Company (CDC). Dealing with multiple parties and essentially two loans naturally makes it more complicated to apply for and secure.
How BFG Helps You Secure Approval
When you work with a company like Business Funding Group LLC (BFG), your chances of getting a loan approved go way up:
Studies have shown that less than 10% of SBA loans initiated by a company at a bank ultimately get funded. Over 90% of the loan applications submitted on your behalf by BFG ultimately fund.
This is because we help you manage the application so it is attractive to lenders.
We have the experience necessary to spot weak points in an application. Addressing them and submitting the best possible application increases your chance of approval.
The chief complaint we get from our clients who have tried to get an SBA loan directly from a lender is that they have to go through submitting so much paperwork before waiting weeks to hear back from a lender if they even think that the loan is something they can do.
At BFG, we do the opposite. Our team has the experience necessary to get you qualified over a 15-20 minute, to the point, conversation. Saving you time and effort!
If we determine that we can not help you obtain a loan at this time, we will counsel you on what needs to happen to get qualified in the future.
Call Us to Discuss SBA Loan Program Options
If you are a small business owner interested in growing your business, an SBA loan could be the answer to achieving your goals. Whether you are planning a business acquisition or need to purchase inventory, we could help identify which type of loan to pursue.
BFG has decades of proven success in helping small businesses secure the right SBA loan that is aligned with their needs. Our team of loan packaging professionals are knowledgeable about the SBA loan program options. Contact us today to get the process started.