Grow Your Business with an SBA Loan
At Century Bank, an SBA loan is more than just a transaction—it’s about building a meaningful partnership. It starts with taking the time to understand your business, your growth strategy, your cash flow, and your long-term objectives. From there, the focus is on identifying the SBA financing solution that best fits your specific needs and guiding you through the process from start to finish.
That relationship doesn’t end once the loan is funded. In fact, that’s just the beginning. As your business continues to grow and evolve, Century Bank remains a resource—providing ongoing loan servicing, along with deposit and cash management solutions to help you operate efficiently. With a relationship-based approach, you have a dedicated team committed to supporting your business every step of the way.
For more information, visit U.S. Small Business Administration
What SBA loan programs are available?
When reviewing SBA financing options, the two primary programs most business owners consider are the SBA 7(a) and SBA 504 loans. Together, these programs represent the majority of SBA-backed funding and are tailored to serve different business needs.
The SBA 7(a) loan is the most common and versatile option. It can be used for a wide range of purposes, such as purchasing commercial property, acquiring a business, refinancing existing obligations, investing in equipment, or covering working capital needs. Loan amounts can reach up to $5 million, with competitive interest rates and repayment terms that may extend up to 25 years depending on how the funds are used. While the application process involves a detailed review of your financial history, business plan, and credit profile, many SBA-approved lenders—especially preferred lenders—can help simplify and speed up the process.
In contrast, the SBA 504 loan is designed specifically for long-term investments in fixed assets, such as owner-occupied real estate or large equipment purchases. This program is structured with two components: one loan provided by a traditional lender and another backed by a Certified Development Company (CDC). Borrowers benefit from lower down payments, fixed interest rates, and repayment periods of 10, 20, or 25 years. The 504 program is particularly well-suited for businesses planning to expand their physical footprint or upgrade essential infrastructure.
Although there are additional SBA programs—such as microloans, disaster assistance, and loans geared toward specific groups like women entrepreneurs—most small businesses find that the 7(a) and 504 programs offer the most practical and flexible solutions. These options often feature favorable terms, lower monthly payments, and greater accessibility compared to conventional financing.
What Are the Eligibility Requirements for SBA Loans?
SBA loan qualifications are intended to direct funding to strong small businesses while also reducing risk for lenders. Because the SBA can guarantee up to 85% of the loan, participating lenders face less exposure, making them more willing to extend financing to borrowers who may not meet conventional lending standards.
To be eligible for an SBA loan, a business must operate as a for-profit entity within the United States or its territories. It must also meet the SBA’s definition of a small business, which differs by industry and is typically based on either annual revenue or number of employees. For instance, many retail and service businesses must fall under a certain revenue threshold, while manufacturers and wholesalers are often evaluated based on employee count. The SBA provides detailed size guidelines by industry, so it’s important to confirm eligibility before applying. In addition, applicants generally need a solid credit profile, a well-prepared business plan, and clear evidence of their ability to repay the loan.
Applicants are also expected to demonstrate a personal investment in the business, whether through time, capital, or both, and show that they were unable to secure comparable financing elsewhere on reasonable terms. Certain types of businesses—such as those engaged in speculative or illegal activities—are not eligible. For SBA 504 loans specifically, funds must be used for fixed assets like owner-occupied real estate or equipment. Projects seeking support through the SBA Green Program must also meet defined energy-efficiency or environmental standards.
During the review process, lenders evaluate both personal and business credit, cash flow, and available collateral when applicable. Strong financial documentation can significantly improve approval odds. Most lenders will request items such as recent personal and business tax returns, current profit and loss statements, balance sheets, and detailed cash flow projections. Providing accurate and organized financial information helps demonstrate your business’s stability and builds confidence with lenders. If you need guidance through the process, working with an experienced SBA lender—such as Century Bank—can help simplify the application and improve your chances of meeting all requirements.
How SBA 7(a) Loans Work?
The SBA 7(a) loan program is the most popular option offered through the Small Business Administration, providing flexible funding for a variety of business purposes. Whether you’re
planning to purchase a business, invest in commercial property, upgrade equipment, or support day-to-day operations, this loan can help support long-term business growth.
These loans are provided by approved lenders, such as banks and credit unions, and are partially backed by the U.S. Small Business Administration. This government guarantee lowers the lender’s risk, making it easier for small business owners to secure financing on favorable terms.
Borrowers can access funding of up to $5 million, with repayment periods that vary depending on how the money is used. For instance, loans used for real estate may have terms as long as 25 years, while financing for equipment or working capital is typically repaid over about 10 years. Interest rates may be fixed or variable and are generally competitive with traditional lending options, though the exact rate will depend on factors like the loan size, lender, and repayment timeline.
7(a) Payment Structure Example:
· Term loans up to $150,000 can be 10, 15, 20 or 25-year term fully amortized of monthly Principal and Interest payments. The SBA guaranty is 85%.
· Term loans up to $5,000,000 can be 10, 15, 20 or 25-year term fully amortized of monthly Principal and Interest payments. The SBA guaranty is 75%.
7(a) Express Payment Structure Example:
· Term loans up to $500,000 to can be 10, 15, 20 or 25-year term fully amortized of monthly Principal and Interest payments. The SBA guaranty is 50%.
· Revolving Line of Credit structure 5 years Revolving Line of Credit at interest only monthly payments then converts to Term after the 5th year. The Term is 5 years fully amortized monthly payment of Principal and Interest. The SBA guaranty is 50%.
Applying for an SBA 7(a) loan requires submitting detailed documentation, including financial statements, tax returns, a business plan, and a clear explanation of how the funds will be used. While the process can be more involved than a standard loan application, many SBA-preferred lenders offer more efficient approvals and guidance throughout the process.
Because of its flexibility, the 7(a) program is often seen as one of the most practical SBA financing solutions. It can be used by startups, business owners looking to acquire an existing company, or those seeking to expand or refinance. For many entrepreneurs, it provides a reliable and adaptable funding option to support evolving business needs.
How SBA 504 Loans Work?
SBA 504 loans are a specialized financing option designed to help small business owners fund large, long-term investments such as purchasing, constructing, or renovating owner-occupied commercial property, as well as acquiring major equipment. This program is especially useful for projects that build equity and contribute to steady, long-term growth.
What makes the 504 loan unique is its three-part structure. Typically, a traditional lender provides 50% of the financing, while a Certified Development Company (CDC), backed by the SBA, covers up to 40%. The borrower contributes the remaining portion, usually at least 10% as
a down payment. In most cases, the CDC financing can reach up to $5 million; however, projects that qualify under the SBA’s Green Energy Program may access up to $5.5 million for energy-efficient or renewable improvements. When combined strategically, total project financing can exceed $10 million, making it a strong option for large-scale expansions.
| SBA 504 Structure Example Total Project cost 10,000,000 | Century – 1st lien | SBA – 2nd lien | Minimum required Borrower Equity |
|---|---|---|---|
| Standard | $5,000,000 - 50% | $4,000,000 - 40% | $1,000,000 - 10% |
| Start-up business | $5,000,000 - 50% | $3,500,000 - 35% | $1,500,000 -15% |
The SBA loan side of the loan come with long repayment periods commonly 10, 20, or 25 years and feature fixed interest rates, which help keep monthly payments stable and predictable. Compared to traditional commercial financing, SBA 504 loans often offer more favorable terms, making them an attractive choice for businesses investing in property, equipment, or facility upgrades.
To apply, business owners must meet SBA eligibility guidelines and provide documentation such as financial statements, tax returns, a business plan, and details on how the funds will be used. Working with an experienced SBA lender or CDC can make the process smoother and help ensure the financing structure aligns with the company’s long-term goals.
