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Business Financing

Frequently Asked Questions: SBA Loans

  • Hide What is a Small Business Administration (SBA) loan?

    The SBA is a federal agency that helps established businesses grow and helps new businesses get started. As a borrower, you’re not borrowing from the SBA, you’re borrowing from a financial institution like Bank of America that works with the SBA to provide loans to small business customers.

  • Show Is an SBA loan only for a new business?

    No. Bank of America provides SBA loans to many established businesses so they can grow and expand.

  • Show What's the difference between an SBA loan and a business loan from Bank of America?

    A conventional business loan from Bank of America is solely the bank’s risk and is subject to Bank lending guidelines. An SBA Express or 7(a) program loan, on the other hand, is a business loan that splits the risk between the Bank and the SBA, which guarantees a portion of those loans. Because of this split risk, SBA loans are subject to the lending guidelines of both the SBA and Bank of America, which in turn is able to take on more risk and provide more flexible terms.

    SBA 504 (the third SBA program in which Bank of America participates) is an SBA loan participation program in which Bank of America directly lends a portion of the total financing need, with the remainder being lent by the Certified Development Company (CDC). The CDC portion is guaranteed by the SBA.

  • Show Is an SBA loan from one bank the same as from another bank?

    No. An SBA loan must still be approved by the issuing bank, and each bank has its own lending criteria. You should discuss specific terms with a bank representative to understand all the terms of your loan. In addition, a bank that's an SBA Preferred Lender is likely to provide you with better terms and a smoother application and closing process than a bank that is not an SBA Preferred Lender.

  • Show Is Bank of America an SBA Preferred Lender?

    Yes. This means we meet all Preferred Lender Program eligibility criteria, including a proficiency in processing and servicing SBA-guaranteed loans. As an SBA Preferred Lender, we're part of the SBA's effort to streamline the procedures necessary to provide financial assistance to the small business community. Learn more about SBA Preferred Lenders

  • Show What types of SBA loans are available from Bank of America?

    Bank of America primarily offers 2 SBA loan products: SBA 7(a) for equipment, inventory, working capital, purchasing an existing business or refinancing business debt and SBA 504 for real estate construction or the purchase of land, a building or long-term equipment. Under certain circumstances, we also offer SBA Express (including Patriot Express) for equipment and working capital.