New emergency loan programs made headlines in 2020 and 2021 as the U.S. Small Business Administration (SBA) helped businesses survive the pandemic. While these programs have since expired, many other SBA loan products remain a viable option for small businesses across South Carolina today.

Best known for offering greater flexibility than many traditional bank products, SBA loans can support the operations and growth of just about any small business. This is good news for South Carolina, as the overwhelming majority of our business landscape – 99. 4 percent, according to 2022 data from the U.S. SBA – is composed of small businesses.

The great number of small businesses that can take advantage of SBA loan offerings across the state raises the questions: What products are currently available, and who can apply? The types of SBA loans available today continue to support credit approval even when the down payment or cash flow of a business remains low. As they have in the past, current offerings generally provide longer terms than conventional loans, which eliminates the need for refinancing every few years. Any small business owner is eligible to apply for an SBA loan, and applicants range from those who have excellent credit to those who may not qualify for other commercial loan programs.  

Current offerings fall into two categories:

SBA 7(a) loans and 504 Loans.

SBA (7a) loans help business owners obtain financing for general business purposes such as working capital, buying equipment or furniture, buying or renovating buildings, and refinancing debt. Loans are issued with terms of a maximum of 10 years for working capital and 25 years for fixed assets for amounts up to $5 million.

SBA loans also offer a lower equity injection requirement – typically 10 percent. A longer term creates lower monthly payments than some conventional credit products, allowing business owners to preserve cash throughout the loan term that they can then invest into their businesses. 

SBA 504 loans require less money down and have longer terms than traditional loans. However, unlike 7(a) loans, 504 funds can only be used as fixed-rate financing for purchasing major assets like real estate and long-term machinery or to renovate facilities. These loans offer a maximum loan amount of $5 million like 7(a) loans, however, they do not require a personal guarantee and typically have higher fees than a traditional bank loan. Other SBA products available include disaster loans, express lines of credit up to $350,000, and microloan programs up to $50,000. 

Preparing to apply and commonly asked questions 

As with any loan, business owners seeking SBA loans must supply specific documents and complete a formal application. Required documents range from personal financial and business profit-and-loss statements to business plans and business licenses. The SBA also advises that business owners should be prepared to answer several key questions:

Why are you applying for this loan? How will it be used?

What assets need to be purchased, and who are your suppliers?

What other business debt do you have, and who are your creditors?

To find experienced SBA lenders in your area, search for those who are part of the SBA Preferred Lender program. Working with a preferred lender generally shortens the period between application and approval in addition to providing many other benefits. TD Bank continues to invest in and develop its SBA lending programs, and the bank is proud to continue its status as a Preferred SBA Lender as well as the top 7(a) lender in South Carolina.

As we look forward to celebrating National Small Business Week later this month, there is no better time for business owners to investigate the latest financial resources available. The more than 460,000 small businesses in South Carolina are the lifeblood of our economy, and TD Bank is one of the many companies proud to support business owners as they continue to propel us forward.

Mike Farmer serves as regional vice president of the Midlands market for TD Bank.