Longer terms and smaller down payments, backed by an SBA guarantee.
SBA 7(a) loans are made by banks and partly guaranteed by the U.S. Small Business Administration. SBA 504 loans pair a bank loan with an SBA backed loan from a Certified Development Company. Both allow longer terms and smaller down payments than many conventional loans. We match the program and the lender to what you are financing.
SBA lending fits the moments that need cash the most.
Buying the building, buying a business or expanding all ask for a large check up front. SBA programs are built to make that check smaller.
Buying owner occupied real estate
A smaller down payment keeps cash in the business instead of in the building.
Acquiring a business or a partner's stake
7(a) is commonly used for acquisitions and buyouts, where conventional lenders may want more equity.
Financing major equipment or expansion
Long terms keep payments in line with how the asset earns over its life.
Working capital a bank will not provide
7(a) includes revolving and working capital options for businesses that fit the program.
Two main programs, built for different jobs.
Private lenders make the loans. SBA backing reduces their risk, which is what allows the longer terms and smaller down payments.
SBA 7(a)
The flexible program. Up to $5 million per loan for working capital, equipment, real estate, acquisitions and refinancing.
SBA 504
Long term, fixed rate financing for major fixed assets such as buildings and heavy equipment, made with a bank and a Certified Development Company.
Working capital
7(a) includes revolving credit options, including the asset based 7(a) Working Capital Pilot program.
Combined use
Since July 4, 2026, eligible borrowers can combine up to $5 million in 7(a) and up to $5 million in 504, for up to $10 million.
SBA loans are made by participating lenders and guaranteed in part by the U.S. Small Business Administration. Cobalt Commercial Credit is not a lender and is not affiliated with or endorsed by the SBA. When Cobalt is compensated in connection with an SBA loan, the fee is disclosed on SBA Form 159. Program limits from the SBA, as of July 2026.
SBA 7(a), SBA 504 and a conventional bank loan.
| SBA 7(a) | SBA 504 | Conventional bank loan | |
|---|---|---|---|
| Uses | Working capital, equipment, real estate, acquisitions and refinancing | Real estate and major equipment. Not working capital or inventory | Set by the bank |
| Maximum | Up to $5 million per loan | SBA portion up to $5 million per project, up to $5.5 million for some manufacturing and energy projects | Set by the bank |
| Borrower down payment | Set by the lender and SBA rules | Typically 10%, rising to 15% or 20% for newer businesses or special purpose property | Set by the bank, often higher than SBA |
| Structure | One loan from a bank, partly guaranteed by the SBA | A bank loan for about 50% plus a CDC loan for about 40% | One loan from a bank |
Program limits and structure as published by the SBA and its lenders as of July 2026. Eligibility and terms are set by SBA rules and each lender.
How much cash could SBA 504 keep in your business?
On real estate and major equipment, the down payment is often the largest check an owner writes. SBA 504 is built to make it smaller.
Enter the project cost to compare cash needed with a conventional loan.
Illustrative estimate only. Uses the typical 504 structure: about 50% from a bank, about 40% from a Certified Development Company and 10% from the borrower, rising to 15% or 20% for newer businesses or special purpose property. Actual terms are set by the lender and SBA rules.
Built for owners who need a large check up front.
Strong candidates
- For profit businesses within SBA size standards
- Real estate the business will occupy itself
- Cash flow that supports the payments
- Owners willing to provide personal guarantees
- A clear use of proceeds that fits the program
Usually a harder fit
- Passive real estate investment
- Businesses above SBA size standards
- Owners unwilling to guarantee the loan
- Business types the SBA excludes, such as lending or speculation
- Timelines too short for SBA processing
Most of the work happens before a lender sees the deal.
We handle the preparation that decides your terms, and stay in it through closing.
Analyze
We decide whether 7(a), 504, a combination or a conventional loan fits the use of funds.
Qualify
Eligibility, size standards, guarantees and cash flow are checked before an application starts.
Structure
Down payment, term and collateral set to keep as much cash in the business as possible.
Execute
We place the request with SBA lenders active in your industry, including lenders with delegated authority to approve in house.
Illustrative scenario. Not a specific client or transaction.
A machine shop leasing its building had the chance to buy a $4M facility. A conventional loan required 25% down, about $1M.
Through SBA 504 with a 10% down payment, about $400,000, the company bought the building and kept roughly $600,000 in cash for equipment and working capital.
What owners ask us first.
How long does an SBA loan take?
Longer than most conventional loans. Lenders with delegated SBA authority can approve in house and move faster, and a complete package shortens the timeline.
Do I need a personal guarantee?
Generally, yes, for owners with significant stakes. Requirements are set by SBA rules and the lender.
Can I use an SBA loan to buy a business?
Yes. The 7(a) program is commonly used for business acquisitions and partner buyouts, subject to SBA rules on equity injection and seller financing.
What changed in SBA loan limits in 2026?
Effective July 4, 2026, eligible borrowers can hold up to $5 million in 7(a) loans and up to $5 million in 504 loans at the same time, for up to $10 million in SBA backed financing. SBA announcement.
Is an SBA loan cheaper than a conventional loan?
Not always. SBA loans carry guarantee fees, and rates vary by lender. The advantage is usually a longer term and a smaller down payment. We compare both.
How is Cobalt paid?
Advice is free. When Cobalt is compensated in connection with an SBA loan, the fee is disclosed on SBA Form 159.
Tell us what you are financing.
A Managing Partner reviews every inquiry, usually within one business day. No credit pull and no obligation to start the conversation.
- If there is a fit, we will ask for financial statements, tax returns and details on the project.
- Your down payment comparison is included with your message.