Our SBA lending financing options offer attractive, long-term financing for owner-occupied commercial real estate for a variety of projects.
SBA Financing At-A-Glance
|SBA 504||SBA 7(a)|
|Designed to help growing businesses with long-term financing for major fixed assets, such as commercial real estate purchases.||Designed to help growing small businesses with financing for a variety of business purposes, including expansion, business acquisition, and the purchase or refinance of commercial real estate.|
|$125,000 to over $20 million||$50,000 to $5 million|
|Up to 90% financing|
10 or 20 year fully amortized (real estate and equipment loans).
Fixed and variable rates available to suit your financing needs.
|Up to 90% financing |
25 year real estate, 10 year equipment and business acquisition, 5-7 year working capital, no balloon payments.
Variable rate, fully amortized for the term of the loan.
Here are more details about the SBA financing options available from Home Bank of California.
SBA 504 ($125,000 to over $20 million)
Offers small businesses another avenue for business financing, while promoting business growth and job creation.
SBA 504 | Loan Benefits
- 90% financing.
- No maximum loan amount.
- Low down payment (10% in most cases).
- Payment stability, preserves working capital.
- Costs included in financing, such as furniture, fixtures, and loan fees.
- No aggregate lending cap for manufacturer and “green” projects – Borrowers can secure multiple 504 loans (each up to $5.5 million max SBA portion) if the company is a manufacturer and the project meets SBA’s green standards.
SBA 504 | Use of Proceeds
The use of proceeds of 504 loans must be used for sized assets (and certain soft costs), including:
- Purchase of existing buildings and improvements (Owner must occupy minimum of 51%)
- Expansion of existing building (Owner must occupy minimum of 51%)
- Leasehold improvements
- Purchase of long-term machinery (Useful life greater than 10 years)
SBA 504 | Eligibility
- Existing for-profit, owner-occupied business (51% if existing building; 60% if new construction).
- Along with its affiliates, a tangible net worth of less than $15,000,000 and an average net income after taxes of less than $5,000,000 in the past two operating years.
- Liquid Resource Test – cash, marketable securities, bonds, and cash value of life insurance can not be greater than the project cost (does not include retirement accounts).
SBA 7(a) ($50,000 to $5 million)
The SBA 7(a) loan is provided by the bank (Home Bank of California) and guaranteed by the SBA.
SBA 7(a) | Loan Benefits
- Flexibility – Financing can be used for most business purposes
- Low down payment – Minimum down payment is as little as 10%; allows the borrower to preserve cash for working capital
- Longer terms & limited prepayment penalty – frees up cash flow as the borrower grows their business
- Specialized Programs available for exporting companies, underserved communities, military and working capital needs:
- SBA will loan on the “value” of the business, even if the collateral does not add up to 100% of the loan amount, and, in some cases, will fund deals with no hard collateral.
SBA 7(a) | Use of Proceeds
The use of proceeds from 7(a) loans include:
- Purchase of buildings, and expansion or conversion of existing facilities
- Purchase of equipment, machinery, furniture, fixtures, supplies, or materials
- Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
- Short-term working capital needs, including seasonal financing, contract performance, and export production
- Financing against existing inventory and receivable under special conditions
- Purchase of an existing business
SBA 7(a) | Eligibility
- Existing for-profit, owner-occupied business (51% if existing building)
- Along with its affiliates, a tangible net worth of less than $15,000,000 and an average net income after taxes of less than $5,000,000 in the past two operating years
- Located in, or planning to locate in, any area of the United States
- Liquid Resource Test – cash, marketable securities, bonds, and cash value of life insurance can not be greater than the project cost (does not include retirement accounts)
Contact one of our Business Bankers today to discuss your options and apply today.