Business Financing and SBA Loans

Securing business financing is one of the most critical steps in expanding or sustaining your business. Whether you are looking for working capital, to purchase new equipment, or to refinance debt, navigating the various financing options can be complex. At Fox & Moghul, our team specializes in helping small businesses obtain financing through traditional lenders and government-backed programs, including SBA loans, with a particular emphasis on the 7(a) loan program.

Understanding SBA Loans and the 7(a) Loan Program

The SBA 7(a) loan is the U.S. Small Business Administration’s primary financing program designed to provide small businesses with the capital they need to grow. The program offers loan guarantees to lenders, making it easier for small businesses to secure funding, even if they don’t meet the stricter requirements of traditional loans.

What can a 7(a) Loan be used for?
The flexibility of the 7(a) loan makes it an attractive option for many small businesses. The loan can be used for a variety of business purposes, including:

• Acquiring or improving real estate
• Purchasing equipment and machinery
• Refinancing existing business debt
• Funding short- and long-term working capital needs
• Buying furniture, fixtures, and supplies
• Changes of business ownership, including partial or full buyouts

For businesses looking to secure financing for significant expenditures, the 7(a) loan can provide up to $5 million in funding. This program is ideal for businesses with special requirements or those that struggle to obtain financing through traditional means.

Eligibility for a 7(a) Loan
To qualify for a 7(a) loan, your business must meet several criteria, including:

• Being an operating business that operates for profit
• Being located in the United States
• Meeting the SBA size requirements for small businesses
• Demonstrating an ability to repay the loan based on the business’s financial status

Additionally, businesses must be unable to secure financing on reasonable terms from non-federal sources. At Fox & Moghul, we work with clients to determine eligibility and guide them through the entire application process.

Navigating the 7(a) Loan Application Process

The 7(a) loan application process can be intricate, and partnering with an experienced legal team ensures your application is submitted correctly and efficiently. You will work directly with an SBA lender throughout the process, and Fox & Moghul provides expert legal counsel to ensure that all required documents, financial statements, and supporting materials are in order.

Steps involved include:

1. Connecting with an SBA lender using the SBA’s Lender Match tool.
2. Submitting the loan application through the chosen lender, including key financial documents like profit and loss statements, balance sheets, and tax returns.
3. Receiving approval for your loan, which can be used for multiple purposes, including working capital and business expansion.

The Benefits of SBA 7(a) Loans

SBA loans offer several advantages over traditional business loans, including longer repayment terms and lower down payments. For instance, most 7(a) loans are repaid with monthly payments of principal and interest based on the business’s cash flow. Fixed-rate loans allow you to make consistent payments, while variable-rate loans can adjust based on the interest rate changes. These terms can be customized to fit your business’s unique needs.

Additionally, businesses that obtain 7(a) loans can leverage the SBA 7(a) Working Capital Pilot (WCP) program, which is specifically designed to help businesses that require additional working capital to cover short-term expenses.

SBA Loans as Part of Your Business Financing Strategy

At Fox & Moghul, we don’t just help you secure SBA loans. We also integrate them into a broader business financing strategy that may include private lending, equity financing, or traditional bank loans. Our goal is to ensure that your financing structure is sustainable, cost-effective, and aligned with your business’s growth objectives.

Why Choose Fox & Moghul for Business Financing and SBA Loans?

At Fox & Moghul, we are experts in guiding businesses through the SBA loan process. Our experience with SBA 7(a) loans and other business financing options allows us to provide tailored legal counsel to meet the specific needs of your business. Whether you’re looking to expand, refinance, or acquire new assets, we ensure that you have access to the best financing solutions available.

Our attorneys regularly educate the business community on financing strategies, including key topics such as how to maximize the benefits of SBA loans. Stay informed by following our Instagram channel, where we discuss financing tips and SBA loan options as well.

Contact Us for Expert SBA Loan Guidance

If you are considering applying for an SBA 7(a) loan or other forms of business financing, Fox & Moghul is here to help. Contact us at 703-652-5506 to schedule a consultation and explore how our attorneys can help you secure the funding your business needs.