IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog has been provided by Addie Roberge of Live Oak Bank (www.liveoak.bank).
SBA Loans in 2025: What You Need to Know
The Small Business Administration (SBA) has provided financial support for business owners and entrepreneurs since its establishment in 1953. This initiative continues to prosper today, offering a wealth of advantages for businesses seeking capital, such as adaptable loans and advantageous terms. The SBA does not provide the funds, but instead backs a percentage of the borrowed amount, which lessens the exposure for participating financial partners enabling banks to offer better terms compared to standard commercial lending options. A range of SBA financing options are available, each specifically crafted for unique business needs. It’s recommended to seek the expertise of a knowledgeable lending institution, specifically a Preferred Lending Partner (PLP), like Live Oak Bank, to navigate the SBA financing application and select the most fitting option for your unique circumstance.
Understanding the SBA Financing Environment
The SBA maintains a detailed standard operating procedure (SOP) that all banks participating in the program must abide by. Bank’s also have their own internal standards and credit policies. Based on these standards and the needs of the borrower individual conditions are determined for each loan. Below is an overview of the top SBA loan programs:
SBA 7(a) Financing
SBA 7(a), the Small Business Administration’s most widely utilized program, is intended to help small businesses in gaining access to funds up to $5 million. These 7(a) loans can finance a variety of needs including tangible and intangible assets such as business acquisitions, expansions, commercial real estate, equipment, inventory, working capital and refinance.
TIP: For projects exceeding the SBA 7(a) $5 million limit, Live Oak Bank’s combination financing program offers a creative solution. We can combine an SBA 7(a) loan ($5 million) with a conventional loan up to $4 million and a line of credit when appropriate.
Live Oak® Express Financing
Live Oak® Express offers SBA loans between $10,000 and $350,000. This service leverages SBA’s expedited loan processing for loans under $350,000. The result is a streamlined approval process, making it faster and easier for you to get the funding you need. These term loans are well-suited for various business needs, including operational funds, equipment purchase, debt consolidation, and employee recruitment. Benefit from the competitive rates, a simplified application procedure, and personalized assistance.
SBA 504 Financing
The SBA 504 program is designed for funding tangible assets including capital equipment and real estate. Unlike other SBA loans, three parties are involved with financing each SBA 504 loan—the borrower, the bank, and the SBA-approved certified development company (CDC).
SBA Microloans
SBA microloans offer financial aid up to $50,000 (with an average of approximately $13,000) to small businesses and qualifying non-profit childcare centers for both initial establishment and expansion efforts. The SBA allocates funds to non-profit, community-based intermediary lenders who then manage these loans, offering both financial resources and business guidance.
The Significance of Partnering with a Preferred Lender (PLP)
Collaborating with the right lending institution is crucial for a positive SBA financing experience. We suggest working with an SBA PLP participant, such as Live Oak Bank, to capitalize on their direct approval authority – meaning the bank doesn’t require final authorization from the SBA. This speeds up the overall approval timeline. Seek out a lender with a proven history of empowering small to medium-sized enterprises. Our specialized knowledge will significantly reduce the time and complexity associated with your financing application procedure.
The Enduring Impact of SBA Financing in 2025
The SBA, in conjunction with institutions like Live Oak Bank, maintains its commitment to supporting the small business sector. As the economic landscape continues to evolve, SBA financing initiatives will persist in equipping entrepreneurs with the necessary financial instruments for success. By grasping the benefits inherent in SBA financing and relying on the expertise of qualified PLP lenders, you can strategically position your enterprise for sustained growth in 2025 and beyond.
Addie Roberge is a Vice President with Live Oak Bank specializing in financing for buyers acquiring privately held companies, family businesses, and owner occupied commercial real estate in Washington. If you have questions about the content of this article or any area relevant to business acquisition financing she would welcome you to contact her at (360) 510-1535 or addie.roberge@liveoak.bank.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.