This is a government-guaranteed loan program to encourage lenders to extend business loans to qualifying small businesses that cannot obtain funds on reasonable terms through other conventional lending. The maximum SBA 7(a) Loan amount is $5,000,000.

Use of Funds

• Owner-User Commercial Real Estate Purchase
• Business Acquisition (Asset Purchase or Stock Purchase)
• Business Debt Refinance
• Partner Buy-Out
• Working Capital
• Machinery & Equipment Purchase
• Construction & Leasehold Improvements

Down Payment

• Minimum 10% for commercial real estate purchase
• Minimum 10% for business acquisition or start-up business (Less than 2 years of operations)

Terms

The maximum loan maturities vary depending on the use of proceeds:

• Commercial Real Estate Purchase/Refinance – up to 25 years
• Business Acquisition – up to 10 years
• Machinery & Equipment Purchase – up to 10 years
• Working capital – up to 10 years
• Leasehold improvements – up to 10 years

Interest Rate

• Variable rate = Wall Street Journal Prime Rate + A margin

Eligibility Requirements

• Must be a for-profit business located in the United States
• Must meet SBA size standards as to annual gross revenues or number of employees
• Cannot be a business engaging in illegal activity under federal, state, or local laws (eg. Cannabis related business)

This program provides small businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. It is designed to create employment opportunities by enabling expanding businesses to reserve working capital for growth.

Use of Funds

• Commercial Real Estate Purchase
• New Facilities Construction
• Commercial Mortgage Refinance
• Heavy Machinery and Equipment Purchase

Standard Loan Structure

• 50% financing from Royal Business Bank
• 40% financing from SBA 504 Loan
• 10% down payment from borrower

Terms

• Bank portion can be amortized up to 25 years with a 10-year maturity
• SBA 504 portion can be amortized up to 25 years with a 25-year maturity

Interest Rate

• Bank portion can be either a fixed or variable rate
• SBA 504 portion is a fixed rate

Eligibility Requirements

• Must be a for-profit business located in the United States
• Must meet SBA size standards as to annual gross revenues or number of employees
• Cannot be a business engaging in illegal activity under federal, state, or local laws (eg. Cannabis related business)