01SBA
A change of ownership is an eligible 7(a) use
Business acquisitions can include several uses of funds, which makes the broader 7(a) framework worth an early look.
SBA loan vs. conventional business loan
Don't pick a label.
Find the better conversation.
Six plain-English questions can show which financing path appears more relevant to explore first—and what to ask before you accept either structure.
No credit pullNo formal applicationFree to you
Your first-look comparison
Tell me what matters in the deal.
Estimates and “not sure” are welcome. Nothing here submits a loan application or makes a credit decision.
Why the result moved
The facts behind the direction.
02Both
Operating history gives both lenders evidence
Established financial performance can support either path, so the actual term sheets and total project structure matter more.
03SBA
One request has to cover several needs
A project combining acquisition, improvements, equipment, or working capital often deserves a 7(a) structure review before it is split into separate products.
04SBA
Cash preservation is a reason to compare structures
SBA-backed loans can offer unique benefits such as lower down payments in some situations, but the required injection and reserves remain transaction- and lender-specific.
Bring these to both lenders
Make the term sheets answer the same questions.
- 01What cash injection, collateral, and post-close liquidity would you require?
- 02What rate structure, amortization, maturity, and prepayment terms apply?
- 03Which parts of my credit profile or project would determine whether this can be approved conventionally?
- 04What would make this request ineligible, unbankable, or materially different from the structure we are discussing?
The honest comparison
Same project. Two different rule books.
“SBA” and “conventional” are starting labels. The useful decision comes from comparing complete, written structures for your actual project.
QuestionSBA-backedConventional
Who makes the loan?
A participating lender makes a 7(a) loan with an SBA guaranty. A 504 project generally combines a lender and a Certified Development Company.
A bank, credit union, or other business lender makes the loan without an SBA guaranty.
What can it finance?
7(a) supports eligible acquisitions, real estate, equipment, working capital, refinancing, and mixed projects. 504 focuses on eligible major fixed assets.
Uses depend on the lender and product. One bank may finance a request another bank will not.
How are terms set?
The lender underwrites the request inside current SBA program limits, eligibility rules, and maximum term or pricing frameworks.
Rate, amortization, maturity, covenants, collateral, and pricing are set by the lender's own credit policy.
What does the process add?
Lender underwriting plus SBA eligibility, documentation, and guaranty requirements.
Lender underwriting and documentation without the additional SBA program layer.
What must be compared?
Cash injection, payment, maturity, fees, collateral, guaranties, prepayment terms, reserves, and flexibility.
The same complete list. A lower quoted rate does not automatically mean a better overall structure.
A useful boundary
A comparison is not a promise.
SBA's 7(a) program supports a broad range of eligible business purposes with loans up to $5 million. The 504 program provides long-term, fixed-rate financing for eligible major fixed assets, with SBA's page listing a maximum loan amount of $5.5 million. Actual conventional products vary by lender.
Every request still depends on eligibility, creditworthiness, repayment ability, project facts, collateral, current program rules, and lender approval. Andrew's guide organizes the questions; it does not make a credit decision.
Program references reviewed July 28, 2026.No pressure. No jargon.
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