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Utah business is looking up post-pandemic. According to The Enterprise, three in five Utah small businesses have fully recovered or expect to be fully recovered by September, and 40 percent have already returned to pre-pandemic levels.

That said, it doesn’t mean small business owners aren’t going to be on the lookout for new and additional business loans. Whether just starting a business or looking to expand, there are several different programs to help meet a variety of needs – from purchasing heavy machinery to providing working capital to grow. Here’s what you need to know:

What is an SBA Loan?

As you may already know, an SBA loan is a specific type of loan offered exclusively to small businesses. It’s partially guaranteed by the Small Business Administration, which reduces the lender’s level of risk and in turn provides benefits like lower down payments and competitive terms to small business owners. 

How to Qualify

Each small business that applies for an SBA loan will be evaluated individually. However, generally speaking, businesses need to:

  • Demonstrate years of healthy financial operations
  • Have a healthy credit score
  • Not exceed the SBA’s small business size standards

Common Types of SBA Loans

SBA 7(a) Loans

The Small Business Administration designed SBA 7(a) loans to assist small business owners in obtaining funds to help their businesses with working capital, real estate purchase, inventory and equipment purchase, debt restructure and business acquisition.

SBA 7(a) loans are guaranteed by the Small Business Administration by a portion of the amount borrowed. Loans are limited by capping interest rates and loan fees. Borrowers can apply for a 7(a) SBA loan by working directly with an SBA lender and the guarantee from the SBA helps businesses acquire funds, even if they otherwise would not qualify for a conventional product. 

SBA 7(a) Loans that Altabank offers

  1. Standard and Small 7(a) term loans
  • Standard loans max out at $5 million, small loans max out at $350,000.
  • The SBA guarantees 85% of loans up to $150,000 and 75% of loans greater than $150,000.
  • Interest rate may be fixed or variable but is capped. 
  • Terms are up to 10 years for non-real estate and up to 25 years for real estate loans.
  • These loans fully amortize with no balloon payments.
  • Guarantee fees and lender fees can be financed with loan proceeds.
  • These loans can be used for permanent working capital, inventory and equipment purchases, debt refinancing, tenant improvements, business acquisitions and real estate purchases.
  • All available collateral will be required to be pledged until the 7(a) is fully collateralized.
  1. SBA Express
  • These loans max out at $350,000. On October 1, 2021, they will be permanently changed to $500,000.
  • The SBA will guarantee up to 50% of the loan.
  • These loans are lines of credit or term loans designed for businesses that need a short turnaround.
  • Can be used as a revolving line of credit for up to 7 years with maturity extensions permitted at the outset. 
  • Lenders may use their existing collateral policy for Express loans.
  1. SBA Export Express
  • Similar features of the SBA Express loan.
  • This program is for exporters who need lines of credit.
  • This also has an expedited turnaround time. 
  1. CAPLines
  • CAPlines follow the general outline of the Standard 7(a) loans.
  • The SBA will guarantee 75% of the loan.
  • CAPlines extend lines of credit to meet short-term and cyclical working capital needs. This is not a term loan and required to revolve like a line of credit.
  • CAPlines last for up to 10 years and are designed to help with general and builder contracts, seasonal resources, and recurring working capital needs.
Who qualifies for an SBA 7(a) loan?

There is a list of requirements that a business must meet in order to qualify, but some of the larger qualifications are that businesses must be defined as a small business by the SBA and operate in the United States. The size standards are measured by the number of employees or annual revenue, depending upon the industry in which the business operates. Businesses must also have attempted to use other financial resources such as a conventional loan before applying for an SBA loan. Borrowers are encouraged to start working directly with their SBA lenders to verify if they qualify for an SBA loan.

Most for-profit types of small businesses are eligible for an SBA 7(a) loan except for businesses that deal with illegal activities, gambling, and any kind of investment or lending activity. Non-profits, charities, and religious groups are not eligible. 

IMPORTANT NOTE: Temporary Modification to the 7(a) Program until September 30, 2021

On January 27, 2021, the SBA issued a Notice modifying the 7(a) Loan Program due to the Economic Aid Act, including temporary higher guaranty percentages and fee reductions on eligible 7(a) loans, and an increase in the maximum SBA Express loan amount. 7(a) loans approved through September 30, 2021 are increased up to 90% guarantee and SBA guaranty fee is reduced to zero subject to the availability of funds. Express SBA loans are also increased to $1MM through September 30th. Maximum loan amount cannot exceed $4,166,666 in order to receive a 90 percent guarantee. 

SBA 504 Loans 

SBA 504 loans are designed to support a community’s economic growth development. They offer financial support for acquiring fixed assets for expansion or modernization, such as equipment or real estate. 

The maximum amount that can be granted is $5 million to $5.5 million depending on the business’ project. The most common structure for a 504 loan is the 50%, 40%, 10% way. This means that 50% of the costs are financed by a financial institution, 40% are financed by the SBA, and the borrower provides a 10% down payment. 

Who qualifies for an SBA 504 loan?

Similar to a 7(a) loan, there is a list of qualifications that must be met and a business must operate as a for-profit entity that operates in the United States and meets the SBA size guidelines for a small business. Those guidelines are defined as a company having tangible net worth of less than $15 million and an average net income of less than $5 million after federal income taxes for the two years leading up to the application. A business must also have qualified management experience, a business plan that’s been deemed feasible, not be engaged in nonprofit, passive, or speculative activities, and must show good character with the ability to repay the loan. 

IMPORTANT NOTE: Temporary Modification to the 504 Program until September 30, 2021

The SBA has offered fee reductions for new 504 loans approved from Dec. 27, 2020 through Sept. 30, 2021. These reductions waive 0.5% Third Party Lender Participation Fee on loan in senior lien position in 504 project and waive 1.5% CDC processing fee (in debenture pricing.)


With favorable interest rates, now may be an ideal time for Utah business owners to consider an SBA loan and Altabank is here to help. Contact us today to begin exploring your options and we’ll help you choose what is best for you and your small business!