SBA Loan Programs

SBA Loans for Entrepreneurs and Small Business Owners

When you look at a Small Business Administration (SBA) loan program to start a business, expand a business, purchase a business, or buy equipment and you want competitive and flexible financing alternatives, there is a lot to consider. Along with the right SBA loan program, selecting the right lending partner – and financial institution for you and your business’s future – adds another layer of consideration.

Here at 21st Century Bank, our experienced SBA Lending Team is here to help – whether you’re simply pondering the idea or ready to make a move. We are among the top 5 SBA Preferred Lenders in Minnesota, meaning we know these programs inside and out. And when it comes to making one of the most critical decisions for your business, we do everything we can to provide you with “big bank” products and services with that community bank customer service.

Let's Talk SBA

The Small Business Administration (SBA) and how they relate to SBA loan programs can seem confusing to those new to this type of commercial lending structure. People often think utilizing an SBA loan means they’re getting a loan from the government.

And while it is true that the SBA partially guarantees SBA loans, eliminating some of the risks for financial institutions that issue these loans, they are not the ones doing the lending. Instead, that happens through a network of approved financial institutions like us, providing you with experienced SBA lenders at 21st Century Bank.

The SBA offers multiple loan programs, so we recommend sitting down with a Business Lending Team member to help you navigate your options.

What are the types of SBA loans?

The SBA offers multiple loan programs, so we recommend sitting down with a Business Lending Team member to help you navigate your options.

SBA 7(a) Program

The SBA 7(a) Loan Program funds business startup costs, equipment, working capital, and real estate, and more, with loan amounts up to $5 million. This program offers the most flexible and longest-term loans. If you need to purchase new land, build, repair existing assets, purchase or expand your existing business, refinance your existing debt, and purchase things like machinery, furniture, fixtures, supplies, and materials, this is the SBA loan program you need.

SBA 504 Program

The SBA 504 Loan Program is perfect for those who want to expand or modernize their small businesses. The program helps small businesses grow by purchasing land, existing buildings, long-term machinery and equipment, and to build facilities and renovate or convert existing facilities.

A few things recipients cannot use SBA 504 loans for are working capital, inventory, financing goodwill, or speculation or investment in rental real estate property.

SBA Express Loan Program

The SBA Express Loan Program can be used as working capital lines of credit for manufacturing, wholesale, services, and retail businesses and used to finance inventory, accounts receivable, and more.

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What SBA Loan is Right for Me?

SBA 7(a) Loan SBA 504 Loan
  • Expand or acquire a business
  • Purchase commercial property or build
  • Refinance existing business debt
  • Purchase equipment
  • Provide working capital
  • Finance building improvements
  • Purchase inventory
  • Refinance owner occupied real estate
  • Purchase land or an existing building
  • Expand or improve an existing building
  • Purchase long-lived machinery


SBA 504 loan term for equipment is up to the useful life of the equipment


Maximum SBA 7a guarantee is $3,750,000, which generally means a maximum project size of $5,000,000 for an SBA 7a loan

Maximum SBA 504 Debenture is $5,000,000

Variable or fixed rate
Fixed rate
10 to 25 years, depending on the loan purpose
Up to 10 years for machinery or equipment
Up to 25 years for real estate

Except in cases of emergency, the SBA guarantees 85% of the loan amount for loans that are less than $150,000 or less and 75% of the loan amount for loans that are greater than $150,000

  • Borrower has a 10% down-payment requirement
  • In certain cases, Individual Guarantors of the loan may have to pledge personal collateral when collateral shortfalls exist.

The most common structure of an SBA 504 is:

  • 50% 1st priority mortgage loan from the Bank
  • 40% 2nd priority mortgage loan from the SBA
  • 10% Borrower down payment

Note that in certain cases for start-up businesses and properties that are deemed special purpose by the SBA, down payments can be up to 20% for an SBA 504 loan.

  • Packaging Fee is paid by Borrower to the Bank - not to exceed $2,500
  • Borrower will pay all costs necessary to document and secure the loan. 
  • Borrower pays an SBA Guarantee fee to the SBA that varies dependent on loan size.
  • Origination Fee is paid to the Bank
  • Borrower will pay all costs necessary to document and secure the loan.
  • Borrower pays SBA 504 and CDC fees.

Frequently Asked SBA Loan Questions

SBA loans provide several key benefits to entrepreneurs seeking funding for their small businesses. These advantages make SBA loans much more attractive than conventional financing:

·         Lower down payments help you keep more cash in your business

·         Longer loan terms of up to 10 years for working capital, ten years for equipment, and 25 years for real estate

·         Lower monthly loan payments

·         Long-term, fully amortizing terms, so there is no balloon payment at the end of your loan

·         Flexible collateral requirements

·         Loan amounts up to $5 million 

What are the benefits of an SBA 504 loan program?

·         SBA 504 can do up to 90% of financing

Conventional loans typically cover no more than 75% – 80% of the project cost, are for a shorter term, and almost always include a final balloon payment.

·         SBA 504 rates are competitive and fixed

Business owners look at the fixed-rate, low down payment, and long term of an SBA 504 loan. In addition, the cost of an SBA 504 over the entire term of the loan may be less expensive than other forms of financing.

Many see that the 504 benefits – Up to 90% financing, with a fixed, long-term rate – make an SBA 504 the better option.

·         Bank lending partnerships with CDC Loan Officers make the process easier

Certified Development Companies (CDCs) partnering with banks help facilitate the SBA paperwork for the borrower. Most business owners have found that the SBA paperwork is not much more than that required by banks – and CDCs make it easy because they are the experts in doing these types of loans.

We're going to bet you go to your mechanic based on a variety of things – cost, service, and convenience included. You should consider the same when selecting a financial institution to be your small business lending partner. While there are multiple SBA Preferred Lenders out there, who you choose to work with sets your business up with a critical financial foundation and sets the tone for its future success. You need a partner you can trust with objective financial advice and guidance and solutions tailor-made to suit your unique situation. And that right there is why we're here.

The Small Business Administration's Preferred Lender Program, or PLP, is the highest honor an institution like ours can receive. We are proud to have been a Top SBA Preferred Lender in Minnesota for the past several years running. Our recognition in Minnesota for our SBA 7(a) and 504 originations means we do this a lot, and we are confident in our approach.


We're proud to be recipients of a U.S. Small Business Administration (SBA) Minnesota Lenders Award for our personalized approach to helping local businesses succeed. The award notes our commitment, hard work, sound business knowledge, financial advice, and tailored services to help companies reach their goals.

Preferred lenders benefit from the distinction of serving as an SBA Professional Lender – it's more than just a title. The advantages are as follows:

  • In-house approval for a quick turnaround so you can put your money to work faster
  • Long-time dedication to serving the small to mid-size business community
  • Expertise and a wide range of tools to meet all of your financial needs

When you're on the verge of pursuing a conventional or SBA loan for your business, we recommend starting a conversation with a Business Banking Lending team member who can help evaluate options.


In general, a large percentage of first-time SBA borrowers are looking for loans under $500,000. Conventional loans are ideal for those with a lot of cash in the bank, but many new entrepreneurs are not in that financial situation. That's where SBA loans come in. This allows for working capital inclusion and often have a 10-year amortization, or payment schedule.

Not all business types are eligible for an SBA Loan. Financial institutions, life insurance providers, passive businesses (for example, investment properties) and speculative businesses (such as oil exploration) are among those who cannot secure SBA financing.


In addition, your business must:

  • Do business in the US
  • Operate for profit
  • Meet SBA business size standards
  • Have a reasonable amount of investment equity
  • Have a demonstrable ability to repay the loan

Committed to making your small business dreams come true? Outlined below is a list of what you typically need to provide to your lender during the SBA loan approval process:


  • Personal Financial Statement
  • Personal & Business Federal Tax Returns for the last 3 years with all supporting schedules for all guarantors and all individuals who own 20% or more of the business. 
  • Year-to-Date Balance Sheet and Profit & Loss Statement dated within 90 days of application (if the loan is for an existing business). 
  • 2-Year Projection of Earnings is required if less than 3 years of historical statements are available. 
  • Accounts Receivable and Accounts Payable Aging Reports may be requested at the bank's discretion, depending on how recipients will use the proceeds or the type of collateral offered. 
  • 3 years of financial information for any other businesses in which the borrower has a controlling interest. 
  • Uniform Franchise Offering Circular (UFOC) for a franchise purchase. 
  • Purchase Agreement if the recipient wants to use the loan for real estate purchases.


During the Loan Process

  • Be ready to provide additional information during the loan process. Sometimes the documentation may not paint a full picture, and your lender may ask for your help in filling in any gaps. 

We invite you to hear from our customers, who can help you explore more about the idea of business ownership – what it looks like and how an SBA program could provide a solution to your small business needs.

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“21st Century Bank just gets it.” -John Hutchinson. "A lot of lenders might give you more funding than you need or are so conservative that you’re not going to hit your growth goals. With Blair and 21st, that wasn’t a problem.”

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And as always,

we would love to hear from you

Our lending team is available to discuss your needs to determine if an SBA program is right for your current or long-term needs.

Send Us An Inquiry

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