A bridge loan is a short-term financing option used to cover costs until a business secures permanent financing or fulfills an existing obligation. Bridge loans are typically used during transitional periods, such as while waiting for an SBA 504 debenture to fund or while completing a property acquisition. They are usually provided by a bank or credit union and are repaid once the long-term financing is in place.

SBA loans are used to finance a wide range of business costs, including land and real estate purchases, new construction, leasehold improvements, equipment acquisition, inventory, and working capital. The specific eligible uses depend on the SBA program. The SBA 504 focuses on long-term fixed assets like real estate and equipment, while the SBA 7(a) covers a broader range of needs including working capital and inventory.

There is no single minimum credit score required for all SBA loans, as requirements vary by program and lender. Generally, a credit score below 650 will require additional discussion during the application process to confirm eligibility. A higher credit score strengthens your application, but lenders also consider overall financial health, business cash flow, and collateral when making approval decisions.

A standard SBA loan application requires several key documents: a basic project and cost overview, two to three years of business tax returns, current financial statements and projections, a debt schedule, personal tax returns and financial statements for all owners, and resumes of all principal owners. Requirements may vary slightly depending on the lender and the specific SBA program.

Interest rates on SBA loans vary depending on the program, the lender, and current market conditions. The SBA 504 program specifically offers fixed, below-market interest rates that are locked in at the time of funding. SBA 7(a) rates are typically variable and based on the prime rate plus a spread. For current SBA 504 rates, visit our interest rates page.

SBA loan interest rates are determined by several factors that vary by program. SBA 7(a) interest rates are influenced by the prime rate, the loan amount, the term length, and the lender's assessment of risk and collateral. SBA 504 interest rates are based on the current treasury bond market rate plus applicable fees at the time the debenture is sold. Both programs are subject to market conditions, but the SBA 504 offers the advantage of a fixed rate for the life of the loan.

To qualify for an SBA loan, a business must be a for-profit entity operating in the United States, structured as a corporation, limited liability company, partnership, or proprietorship. For the SBA 504 program specifically, the business must have a tangible net worth under $20 million and an average net income below $6.5 million over the past two years. Other SBA programs have different thresholds, so eligibility depends on the specific loan type and the lender's requirements.

The most commonly requested preliminary documents for an SBA loan application include a project and cost overview, two to three years of business tax returns, current financial statements and projections, a debt schedule, personal tax returns and financial statements for all owners, and owner resumes. Your lender or certified development company may request additional documentation depending on the program and project complexity.

Approval timelines for SBA loans depend on several variables, including the complexity of the project, the responsiveness of all parties, and the specific SBA program being used. Key participants include the business and its owners, the participating lender, the certified development company (for SBA 504 loans), and the SBA itself. Working with an experienced lending partner and having your documentation prepared in advance can significantly speed up the process.