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SBA Lending

Preferred SBA Lending

Preferred Bank is designated by the U.S. Small Business Administration as an approved Preferred Lender (Preferred Lender Program, PLP). As a PLP lender, our experienced SBA Department offers small businesses various financing types, from working capital to business and real estate acquisitions. Our SBA staff will guide you through the best available programs to meet your specified needs and closing timeline. Contact the SBA Team at SBALending@preferredbank.com.

SBA 7 (a) Loan Program

This is a government-guaranteed loan program established by U.S. Small Business Administration (SBA) to encourage lenders in assisting qualified small businesses unable to obtain funds on reasonable terms through conventional loans. The maximum SBA 7(a) loan amount is $5,000,000.

SBA 504 Loan Program

This program provides long-term, fixed-interest rate financing for major fixed assets, involving owner-occupied commercial real estate. The SBA 504 loan program offers small businesses financing with low down payment requirements. Processing an SBA 504 loan involves three parties: Lender (Preferred Bank), the Certified Development Company (CDC), and Borrower.

	SBA 7(a) Loan Program	SBA 504 Loan Program
Use of Funds	Working capital Equipment & inventory purchase Leasehold improvements & construction Business acquisition Real estate purchase Business debt refinancing	Commercial real estate acquisition New facilities purchase or construction Existing facilities improvement Machinery & equipment purchase Commercial mortgage refinancing
Standard Loan Structure	Loan structure varies based on the financing request	50% financing from Preferred Bank 40% financing from CDC (SBA 504 Loan) 10% down payment from Borrower
Loan Terms	Business involved project – up to 10 years Real estate involved project – up to 25 years	Preferred Bank’s portion can be amortized up to 25 years with a 10-year maturity SBA 504 portion can be amortized for up to 25 years with a 25-year maturity
Interest Rate	Variable rate based on Wall Street Journal Prime (WSJP) Rate plus a margin	SBA 504 portion is a fixed rate for the entire loan term
Eligibility Requirements	Must meet the SBA size standard based on annual gross revenue or number of employees by business industry type Must be a for-profit business operating and located in the United States	Must meet the SBA size standard based on annual gross revenue or number of employees by business industry type Must be a for-profit business operating and located in the United States

Disclosures:
SBA loan products are subject to credit approval and program guidelines. SBA loans are subject to SBA eligibility guidelines. Certain restrictions apply to refinancing options and are subject to program terms. Other limitations and restrictions may apply.