Small Business Loan Products

Our programs offer flexibility, long-term amortization, and speed to closing.

SBA Preferred LenderWe are an “SBA preferred lender” and offer government-guaranteed loans such as SBA 7(a) and SBA 504 loans ranging in size from $250,000 to $15,000,000. We lend to physicians, professional offices, veterinarians, child care, assisted living, convenience stores, and dozens of other industries.

The best way to learn about our programs and start the process is to fill out our short, on-line contact form, or call one of our business development officers to talk about your financing needs.

SBA 7(a)

All 7(a) loan applicants must meet the program's eligibility requirements, which are designed to be as broad as possible.

SBA 7(a) loans are provided by authorized commercial lenders like CapitalSource Small Business Lending, who participate in the program. CapitalSource Small Business Lending is a Preferred SBA 7(a) Lender which gives us the authority to make credit decisions on behalf of the U.S. government and enables us to process loans more quickly and efficiently than most other SBA lenders. We control the whole process.

SBA 7(a) Loan Details

Loan Purpose: Commercial real estate purchase, refinance, and construction, including working capital and other business assets.

Loan Amount: $250,000 to $5,000,000.

Time to Close: Closing within 45–60 days of signed commitment letter.

Loan To Value: Up to 125% (up to 125% on general purpose real estate and up to 130% for medical office condominiums or office buildings.)

Interest Rate: Competitive rates.

Term: Up to 25 years based on the loan purpose. No balloons or calls—fully amortizing over the life of the loan.

Prepayment Penalty: Declining penalty over 3 years (5%, 3%, 1%).

Fees:
No loan origination fee.
One-time SBA loan guarantee fee based on loan size.
Good faith deposit to be used for loan closing costs.

Collateral: First lien on assets being financed.

Recourse: Personal guarantees for all individuals owning 20% or more. Corporate guarantees of affiliated companies may be required.

Debt Service Requirements: Projected debt service coverage of 1.25:1 times.

Industries: All for-profit businesses that meet SBA eligibility requirements.

Eligibility: All 7(a) loan applicants must meet the program's eligibility requirements, which are designed to be as broad as possible.

SBA 504

Flexibility, low equity requirement, long term amortization, and speed to closing.

This program is for the purchase of fixed assets such as commercial real estate, machinery and equipment of a capital nature, which are defined as assets that have a minimum useful life of 10 years. Proceeds cannot be used for working capital.

There are three parts to a typical SBA 504 loan:

  • CapitalSource Small Business Lending conventional first mortgage loan of approximately 50% of the purchase price of the assets;
  • SBA fixed-rate debenture/second mortgage loan of approximately 40% of the purchase price of the assets;
  • The borrower contributes the remaining 10%. If the property is special-use real estate, a 15% contribution is required by the borrower; if the property is a special-use and start-up operation, a 20% contribution is required. Special-use properties are properties that can only be used for the purpose for which they were built.

In providing a 504 loan, CapitalSource Small Business Lending works with your local certified development corporation (CDC). CapitalSource Small Business Lending approves our portion of the financing request, and the CDC works with the SBA to approve the SBA portion of the request.

504 Loan Details

Loan Purpose: Commercial real estate purchase, including equipment or other fixed assets.

Loan Amount: Up to $12,000,000 split into 2 loans:
 CapitalSource SBL first mortgage: Up to $7,000,000.
SBA 504 debenture second mortgage: Up to $5,000,000.

Time to Close: Closing within 45–60 days of signed commitment letter.

Loan To Value: Up to 90%.

Interest Rate: Competitive rates available:
 CapitalSource provides competitive rates.
SBA 504 debenture second mortgage is a 20-year fixed rate that is normally below market rates.

Term: Up  to 25 years with no balloons or calls—fully amortizing over the life of the loan.
 CapitalSource Small Business Lending has a loan term up to 25 years.
SBA 504 debenture second mortgage has a loan term up to 20 years.

Prepayment Penalty: Prepayment penalties will apply.

Fees: CapitalSource Small Business Lending generally requires a 1% loan fee on both the 1st and 2nd loans. SBA 504 debenture second mortgage has a one-time SBA loan guarantee fee based on loan size.

Collateral: First lien and second lien on all assets being financed.

Recourse: Personal guarantees for all individuals owning 20% or more. Corporate guarantees of affiliated companies may be required.

Debt Service Requirements: Projected debt service coverage of 1.25:1 times.

Industries: All for-profit businesses that meet SBA eligibility requirement.