SBA Loan (7a or 504)
Government-backed loans with favorable rates for qualified small businesses.
Small Business Administration (SBA) loans are partially guaranteed by the federal government, reducing lender risk and enabling better terms for borrowers — lower down payments, longer repayment periods, and competitive interest rates. The SBA 7(a) loan is the most flexible, covering working capital, equipment, real estate, and business acquisitions up to $5 million.
The SBA 504 loan is purpose-built for fixed assets like real estate and equipment, with up to 90% financing and terms up to 25 years. SBA loans require strong documentation, 2+ years in business, and reasonable credit, making them a better fit for established businesses than startups — but the terms are among the best available anywhere. Approval timelines range from 30 to 90 days depending on lender and loan type.
Example
A 6-year-old manufacturing business wants to acquire a competitor for $800,000. They qualify for an SBA 7(a) acquisition loan with 10% down ($80,000), a 10-year term, and a rate of prime + 2.75%. Their monthly payment is around $8,500 — funded in large part by the acquired business's existing revenue stream.
