SBA Loans for Business Acquisition: 7(a) vs 504

SBA loans provide government-backed financing for U.S. small businesses. The two most common programs are SBA 7(a) — flexible general-purpose loans — and SBA 504 — specifically for owner-occupied real estate and major equipment.

SBA 7(a) loans fund business acquisition, working capital, equipment, and debt refinancing. Terms reach 25 years for real estate and 10 years for equipment. Down payments typically run 10–20%.

SBA 504 loans combine a bank loan (50%) with an SBA-backed debenture (40%) and borrower equity (10%). They're ideal for purchasing owner-occupied commercial property or major equipment.

Qualification requires a for-profit U.S. business, typically 2+ years operating history (exceptions for acquisitions), good personal credit (680+), and demonstrated ability to repay from business cash flow.

SBA loans take 30–90 days to close — longer than private capital but with better terms. If you're acquiring a business or buying owner-occupied property, contact Yoder Funding to explore SBA options.