September 5, 2023 By Caitlin Rose

Earlier this year, the Small Business Administration (SBA) announced an increase to the maximum loan amount for the 7(a) SBA loan. The new max loan amount is $500,000, an increase from $350,000 or less. This increase puts the 7(a) loan maximum at the same amount as the SBA Express Loan Program. Both of these programs play important roles in supporting small businesses by providing access to capital and favorable loan terms.

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More capital, more options

With the increase to $500,000, small businesses may use their loans to increase capital, fuel growth, hire new employees, and contribute to the economic wellbeing of their communities. 

SBA loan funds may be used in many different ways, including:

  • Acquiring, refinancing, or improving real estate and buildings
  • Short- and long-term working capital 
  • Refinancing current business debt 
  • Purchasing and installation of machinery and equipment
  • Purchasing furniture, fixtures, and supplies 
  • Changes of ownership (complete or partial)
  • Multipurpose loans, including any of the above

Small businesses that experience high levels of seasonality may especially benefit from this increase. Having additional working capital to make payroll, stock inventory, and upgrade equipment during off-seasons may help ensure seasonal businesses stay afloat all year round. 

Small loan, huge opportunity

Small businesses across different industries may apply for SBA 7(a) loans. The  top five industries to access SBA funds are:

  • Construction
  • Accommodations and Food Services
  • Retail
  • Professional, Scientific, and Technical Services
  • Health Care and Social Assistance

Across all SBA loan types, 50% of loans are under $150,000, with the majority of all loans under $50,000. However, with the recent increase, small businesses may begin applying for higher loan amounts. 

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Amazing Balloons by Gee®: A success story

One business that has used SBA loan funds to their advantage is Amazing Balloons by Gee, a SmartBiz® client. Claudia Gee formed Amazing Balloons by Gee with her husband more than 20 years ago. Amazing Balloons by Gee specializes in creating theme decor for all occasions, big and small. At the height of their business, they had eight people working from their home-based office in Southern California. Then tragedy struck the U.S. on September 11, 2001. 

After 9/11, parties stopped. Gee and her husband used personal credit cards to keep their business operating. They were able to weather the storm and come back strong. Gee had a business line of credit as well, but the line of credit was sold to a bank and closed. Gee had to keep making payments but was unable to access money for their business. It became harder to manage cash flow and like many small business owners, she found it difficult to secure the relatively small loan size she wanted.

That’s when she discovered SBA loans and SmartBiz. After a five-minute pre-qualification, Gee started the application process. She secured a $150,000 loan with 10-year payback, consolidated debt, and reduced their monthly payments from $4,000 to $1,600. Gee and her husband are expanding their team and looking forward to growing their business, instead of their credit card debt. Read more of their story.

Applying for a SBA  loan

If your business could benefit from a SBA loan, SmartBiz may be able to help. Our dedicated team and streamlined application process makes it easier than ever to find the right loan for what your business needs. Pre-qualify for up to $500,000 in just five minutes. Find out more and apply today.

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