SBA loans get a lot of attention — and for good reason. But they're not always the right tool, and understanding the difference helps you choose the right product for your situation.
What Is an SBA 7(a) Loan?
An SBA 7(a) loan is a conventional bank loan that the Small Business Administration partially guarantees. Because the government backs a portion of the risk, banks are willing to lend to businesses they might otherwise decline, often with better terms.
- Loan amounts up to $5 million
- Terms up to 10 years (working capital) or 25 years (real estate)
- Rates tied to prime — typically 6.5–10%
- Requires SBA approval in addition to bank approval
What Is a Conventional Bank Term Loan?
A conventional term loan comes directly from the bank without the SBA guarantee. Underwriting is the bank's decision alone — which means faster processing but stricter qualification criteria.
- Faster approval — weeks rather than months
- Fewer fees (no SBA guarantee fee)
- Stronger credit and revenue requirements
- Terms typically 3–10 years
If you qualify for a conventional bank term loan, it's often faster and less costly than the SBA route. SBA loans are best when you need longer terms or when conventional programs won't approve you.
Which Is Right for You?
The answer depends on your credit, revenue, time in business, and what you're using the funds for. We evaluate both options for every client and recommend the path most likely to get you funded at the best rate.
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Talk to a consultant about your situation. We review your file, match you to the right bank program, and manage the full process until you’re funded.
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