RepublicBankAz is proud to offer Small Business Administration (SBA) loans to eligible credit worthy businesses throughout the Western United States. RepublicBankAz is an approved lender for the SBA 7(a) and SBA 504 loan programs. The 7(a) and 504 loan programs are the largest and most popular of all SBA loan programs.
Information on each program is listed below.
SBA 7(a) Loans
SBA 7(a) loans are the most basic and popular Small Business Administration (SBA) business loans. The name "7(a)" comes from section 7(a) of the Small Business Act, which authorizes the SBA to provide financing for America's small businesses.
SBA 7(a) loans are provided by authorized commercial lenders like RepublicBankAz who participate in the program. The participating lender funds the loan and receives a guarantee of up to 75% of the loan amount from the SBA. This allows us to make loans to businesses that might not qualify for financing from other lenders. In addition to funding the loan, the participating lender is also responsible for administering the loan throughout its life.
All 7(a) loan applicants must meet the program's eligibility requirements, which are designed to be as broad as possible. Businesses must meet SBA size standards, must be "for-profit", must be without internal resources to provide the financing, and must be able to demonstrate repayment ability.
SBA 504 Loans
RepublicBankAz participates in the SBA's 504 loan program. This program is for the purchase of fixed assets such as commercial real estate and machinery and equipment of a capital nature, which are defined as assets that have a minimum useful life of ten years. Proceeds cannot be used for working capital.
There are three parts to a typical SBA 504 Loan
RepublicBankAz conventional first mortgage loan of approximately 50% of the purchase price of the assets.
SBA fixed rate debenture/second mortgage loan of approximately 40% of the purchase price of the assets.
Borrower contributes the remaining 10%. If the property is special use real estate, a 15% contribution is required by the borrower, and if the property is a special use and a start-up operation, a 20% contribution is required. Special use properties are properties such as gas stations, motels, assisted living facilities that can only be used for the purpose that they were built.
In providing a 504 loan, RepublicBankAz works with your local Certified Development Corporation (CDC). RepublicBankAz approves its portion of the financing request, and the CDC works with SBA to approve the SBA portion of the request. Since the SBA portion of the financing request is a debenture that must be arranged with the financial markets, the SBA funds are often not available until after the asset has been purchased. In order to fill this gap in the SBA financing, RepublicBankAz provides interim financing for the SBA debenture amount so that your purchase transaction is not delayed.