U.S. citizens who own for-profit businesses incorporated in the U.S. may apply for SBA financing.

Our SBA loan requirements also include an applicable size standard. At TowneBank SBA, our underwriting rules use the alternative size standard, which means your business must have tangible net worth of no more than $20 million and average after-tax net income of no more than $6.5 million for the two prior full fiscal years.

Other SBA eligibility requirements may apply, depending on the loan and transaction. We’ll review your specific circumstances before moving forward.

SBA loans are generally available to eligible for-profit businesses that meet SBA size and ownership requirements and can demonstrate the ability to repay the loan. The business must operate in the United States, and the loan proceeds must be used for an eligible business purpose. SBA rules also address ownership, credit, collateral, equity injection, and other aspects of the transaction.

Eligibility varies by loan program and deal structure, so meeting the basic requirements does not guarantee approval.

We consider your personal credit score and credit history as one part of the complete picture of creditworthiness, alongside the business cash flow shown in your financial statements, management experience, and available collateral.

We do not promise a hard minimum SBA loan credit score because a credit score alone does not tell us whether a deal makes sense. Instead, we look at the circumstances behind the credit history and how the credit profile fits with the overall strength of the request.

At TowneBank SBA, our approach is simple: we look for deals that make sense, rather than deals that check boxes.

To help you quickly determine whether SBA financing fits, eligible borrowers are generally U.S. citizens who own for-profit, U.S. incorporated businesses that meet SBA size and other eligibility requirements. Businesses outside those boundaries may need a different financing solution.

For example:
•    If you are purchasing investment property rather than financing an operating business, a conventional commercial real estate mortgage may be a better fit.
•    If your business does not meet SBA size or eligibility rules, conventional business financing may be an alternative solution.

We’ll tell you early when a different option makes more sense.

Yes, certain startups may qualify for SBA financing. For example, franchise startups using certain concepts may be a good fit when the franchise, borrower, and overall transaction meet SBA and lender requirements. SBA loans for non-franchise startups are possible but represent a very small portion of the opportunities we finance.

If you are starting a franchise, we can help you determine whether the concept and your circumstances fit our SBA lending approach. For most non-franchise startups, a different source of startup financing is often more appropriate.

The maximum individual SBA 7(a) loan is $5 million. In some circumstances, a borrower may access up to $5 million through a 7(a) loan and an additional $5 million through an SBA 504 loan, for up to $10 million in combined financing.

 However, SBA rules limit the total SBA-guaranteed exposure available to one borrower, so $10 million, as the max SBA loan amount, is not available in every situation. The appropriate SBA loan maximum depends on the loan programs, transaction structure, project, and applicable SBA limits. Whether a borrower qualifies for the maximum SBA loan amount depends on the circumstances of the individual transaction. 

Depending on the transaction and structure, SBA financing may cover up to about 90% of the total project cost, meaning your equity injection (i.e., the borrower’s required contribution toward the project) may be considerably less than a conventional loan requires.

Your SBA loan down payment depends on the transaction, loan program, project cost, and credit structure. We’ll explain your required equity injection early, including what funds may qualify and how much cash you should expect to need at closing.

Yes, in certain SBA 7(a) transactions, 100% financing may be possible. Examples may include qualifying partner buyouts, purchases that replace rent expense, and certain business acquisitions.

This does not mean every SBA loan requires no borrower equity, and eligibility depends on the specific transaction, structure, and SBA requirements. We cannot promise 100% financing for every deal, but when a transaction can be structured with little or no cash injection, we’ll explain how the structure works and what conditions must be met.

Eligible fees and closing costs can often be included in the total project cost and financed as part of the SBA loan structure. When this is possible, the cash you need at closing could be substantially lower than what is typically needed for conventional financing. The specific costs that can be financed depend on the transaction, loan program, and applicable SBA rules.

We’ll identify the eligible costs, explain how they affect your total project cost, and show you how much cash you should plan to contribute.

Potentially. Under SBA rules, when business assets do not fully secure a loan on a discounted basis, the lender must look to the personal assets of owners holding 20% or more. So, liens on personal real estate are common when those assets are available.

This is an SBA requirement, not a TowneBank SBA policy. We explain it upfront because it is better to understand the collateral requirements before you invest time in a transaction.

For legal questions about liens or guarantees, we recommend consulting your attorney.

A collateral shortfall does not necessarily prevent an SBA 7(a) loan. The SBA guarantee helps mitigate situations where available business and personal collateral does not fully secure a loan. As a result, we can sometimes structure 7(a) loans with substantial unsecured portions, including amounts well above $2 million. Collateral is one part of the credit decisions alongside cash flow, credit history, experience, and the overall strength of the transaction.

Generally, no. Personal assets are usually not pledged for an SBA 504 loan, which may be an important distinction when considering SBA 504 vs. 7(a) financing.

A 504 loan is designed primarily around eligible fixed assets and features a different structure from a 7(a) loan. Specific collateral requirements vary with the transaction, so we’ll explain what applies to your individual deal.

SBA rules generally require owners holding 20% or more of the business to provide a personal guarantee. The requirement applies based on ownership percentage, not simply whether you are actively involved in the business. Collateral requirements are related but separate, and personal assets may also be subject to liens when SBA rules require the SBA lender to look to available collateral.

Since guarantees and liens have legal implications, we recommend discussing those obligations with your attorney.

Our SBA loan process starts with a pre-screen, and we aim to provide an answer within two to three days. As an SBA Preferred Lender, our goal for SBA 7(a) program requests is to make a credit decision within 10 business days of having a complete SBA loan application package and assigning an underwriter to the deal. Closings typically run 30 to 60 days.

Please note that actual timing often varies by transaction. Construction and 504 loans follow different timelines due to additional review requirements.

Repayment terms on SBA loans generally range from 10 to 25 years, depending on the loan program, use of proceeds, and underlying assets. SBA-guaranteed loans are fully amortizing, meaning the borrower makes scheduled principal and interest payments throughout the term, rather than facing a large balloon payment at maturity.

We’ll structure the repayment term around the transaction, your business’s needs, and the useful life of the assets being financed.

Incomplete or delayed documents are the biggest source of avoidable delays. No loan request progresses to credit until every required item has been received and the file is complete. That makes document speed your most important lever in the timeline. Providing complete information promptly and responding quickly to questions helps keep the loan moving from submission into underwriting and toward closing.

The process follows seven steps:

1.    Pre-screen
2.    Proposal letter (term sheet)
3.    Complete submission
4.    Underwriting
5.    Construction review (when applicable)
6.    Closing
7.    Post-closing and servicing

Each stage has defined requirements and a dedicated team member helping move the file forward.

Our SBA loan process is often faster than most borrowers expect because SBA lending is all we do. Having an SBA-only team means your request doesn’t compete for attention with mortgages or car loans, while our Preferred Lender status allows us to approve 7(a) loans in-house, rather than waiting in the SBA queue. Additionally, written checklists keep each stage organized, and a dedicated closer manages the final steps.

SBA 7(a) loans are flexible, cash-flow-based financing that could be used to support business acquisitions, partner buyouts, owner-occupied real estate, construction, or expansion.

SBA 504 loans run through a certified development company (CDC) and are designed for major fixed assets, primarily owner-occupied commercial real estate and equipment with a useful life of at least 10 years.

The right program depends on what you’re financing and how the transaction is structured. In some cases, both programs can be used together on one transaction.

Yes. An SBA 7(a) and SBA 504 loan can be combined in certain transactions when each program finances an eligible part of the project.

A common example is a buyer purchasing an existing business along with the real estate it occupies. In this instance, the 7(a) would finance the business acquisition, while the 504 would finance the eligible owner-occupied real estate.

Combining the programs allows each loan to serve the purpose for which it is best suited. We’ll evaluate your complete transaction and goals to determine whether that structure makes sense.

SBA loan rates are structured and subject to SBA limits, so the rate is only one part of the cost. The more useful questions are how much cash you need at closing and what your monthly payment will be. SBA financing can offer 10- to 25-year fully amortizing terms, no financial covenants, and the ability to combine multiple eligible uses of proceeds in one loan. These factors can significantly affect a business’s cash flow and total financing needs.

We’ll explain the structure and costs before you commit.

An SBA Preferred Lender is an SBA-approved lender that is authorized to make certain SBA 7(a) approvals in-house, without waiting for the U.S. Small Business Administration to review and approve each loan.

TowneBank SBA’s Preferred Lender status applies to SBA 7(a) loans only, not SBA 504 loans. This delegated authority is one reason why our 7(a) process can move more efficiently than most borrowers expect. However, 504 transactions follow a separate structure involving a Certified Development Company.

Probably. We work with a wide range of established professions and industries, including:

• Dental and medical practices
• Veterinary practices
• Senior care
• Attorneys
• Certified public accountants (CPAs)
• Pharmacies
• Insurance agencies
• HVAC, plumbing, and electrical contractors

Our experience in these fields helps us understand the business, cash flow, equipment, and real estate behind financing practice loans tailored to eligible professional businesses.

Yes. We provide SBA lending across 48 states. Our national SBA team works with business owners and buyers across a wide range of markets. With TowneBank SBA, business owners all across the country can work with a dedicated SBA lending team without needing to be located near one of our banking offices.

Yes. Business acquisitions are one of the largest parts of our SBA lending business, with acquisitions and partner buyouts representing roughly 60% of our loan volume. We provide business acquisition loans for eligible transactions, including purchases of established businesses and, in some cases, related real estate. We’ll evaluate the business, buyer, and transaction structure to determine the appropriate financing.

Yes. We finance eligible ground-up construction, renovations, and leasehold build-outs through SBA financing. Our team has dedicated internal resources to help manage the financing alongside the construction project, including reviewing project costs and documentation, as your deal progresses.

Due to the project-specific considerations involved, construction financing requires additional review that may impact the overall SBA loan timeline.

We finance complete SBA transactions, rather than standalone lines of credit or working capital loans. Working capital may be included as part of a larger eligible SBA 7(a) transaction.
If you need working capital on its own, a conventional banker may be a better place to start. If your need is part of a larger transaction, we welcome the opportunity to review it.

We finance eligible real estate used by your operating business, generally requiring at least 51% occupancy of an existing building or 60% of new construction. We do not finance investment property held primarily for rental income.

For a rental property, a conventional commercial mortgage may be a better fit. If you’re financing your own operating space, we invite you to get started with our pre-screen.

No. TowneBank SBA does one thing: SBA lending. We do not offer deposit accounts, lines of credit, or merchant services. Our focused model enables us to provide a high level of expertise and streamlined processes. Additionally, we pose no cross-sell competition for referral partners (such as brokers, attorneys, CPAs, and franchise consultants).
Put simply, our goal is to move SBA financing forward.

No. SBA Microloans are provided through nonprofit, community-based intermediary lenders. Our team focuses exclusively on SBA 7(a) and SBA 504 financing.

If you need a smaller amount that fits the Microloan program, an SBA Microloan intermediary may be the appropriate resource. For an eligible 7(a) or 504 transaction, our specialized SBA lending team is here to assist you.