Small Business Administration Loans
Government-guaranteed loans to help your business grow.Speak with our team Learn more
Clear Benefits of SBA Loans
Built for small businesses
SBA loans are specifically designed to help small businesses grow with financing that works for them.
Backed by the Small Business Administration, SBA loans can offer more flexible terms and rates than conventional loans.
Preferred SBA Lender
Our preferred status means a faster loan approval process for your business.
Frequently asked questions.
Questions about SBA Loans
What types of businesses are eligible for SBA financing?
Most owner-managed for-profit businesses are eligible for the program. However, the SBA does provide a list of ineligible businesses. Examples of ineligible businesses include those involved in real estate speculation (e.g., apartments and retail centers), lending (e.g., factoring), and illegal or morally questionable activities.
Who is a good candidate for an SBA loan?
An applicant who has a loan request that does not quite meet the bank’s conventional lending policies. This may be due to insufficient collateral, lack of historical cash flow, limited equity injection or a similar deficiency. Note: The SBA guarantee allows the bank to overcome certain deficiencies, but it does not make a bad loan good.
How may loan funds be used?
Proceeds may be used for a wide range of business purposes—including, but not limited to—real estate acquisition or refinancing, working capital, business acquisition, inventory acquisition, startup costs, equipment acquisition, partner buyouts, and construction/leasehold improvements.
What are typical loan terms?
- Projects involving real estate will typically receive a 25-year fully amortizing term.
- Equipment, leasehold improvement, and business acquisition requests may receive a loan term of up to 10 years, or equal to the useful life of the assets being financed.
- Loans with a mixed use of proceeds may receive a blended term based on a weighted average calculation.
What is typical pricing?
Cadence Bank typically prices SBA 7(a) loans at a spread over the Wall Street Journal Prime Rate and adjusts quarterly. Pricing typically ranges from Prime + 1.50% to Prime + 2.75%, depending on the characteristics of the transaction. SBA prohibits lenders from charging a loan origination fee; however, the bank is allowed to charge a packaging fee (typically $2,500 per transaction).
Does SBA have a minimum personal credit score?
No. The SBA Department follows the bank’s loan policy regarding personal credit history.
Do real estate transactions require a certain level of owner-occupancy?
Yes. The borrowing entity must occupy at least 51% of the building being financed.
What level of equity injection is required?
An equity injection is typically required. The required percentage will vary depending on the transaction’s overall strength, but 20% is a good rule of thumb. Factors such as seller financing or additional collateral can lower this percentage. It is not uncommon for a business acquisition or expansion scenario (where cash flow is proven and consistent) to have a 10% equity injection requirement.
Is industry experience critical?
Industry experience is important but not required. We place significant focus on a guarantor’s background and transferable skills.
Are lines of credit available?
We do not generally offer lines of credit. We typically prefer to provide working capital on a permanent basis via a 10-year term loan.
How important is collateral?
SBA 7(a) loans are not limited to the availability of collateral. However, the SBA does require that we pursue all available collateral until a loan is either fully secured or all available collateral has been exhausted. Requests with strong cash flow, a strong guarantor or a proven franchise brand may be acceptable on a largely unsecured basis (just a UCC-1 filing against business assets). Note: It is common for equity in a guarantor’s personal residence to be pledged as part of the available collateral.
How long does an SBA loan take to underwrite and close?
As with any loan product, the customer’s participation is key to a timely closing. Assuming a proactive and organized customer, 30-45 days from receipt of a complete package is a reasonable expectation.
What is Cadence Bank's geographical focus for SBA lending?
We will consider opportunities in all 50 U.S. states.
Considering an SBA loan? We can help.
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