Small Business Administration

An SBA loan is a small business loan that’s partially guaranteed by the U.S. Small Business Administration (SBA) and issued by a participating lender like Veritex Bank Government Lending. The SBA doesn’t lend money directly—instead, it provides a government guarantee that reduces the lender’s risk, making it easier for small businesses to qualify for financing.

SBA loans are designed to help small businesses start, grow, or expand by offering benefits like:

• Lower down payments

• Longer repayment terms

• Flexible use of funds

• Competitive interest rates

The most popular SBA loan program is the SBA 7(a) loan, which can be used for a wide range of purposes including business acquisitions, working capital, real estate, equipment purchases, or refinancing existing debt.

At Veritex Bank, we’re a Preferred SBA Lender, which means we can approve loans in-house—helping you move through the process faster and more efficiently.

No, the SBA does not lend money directly to small businesses. Instead, it partners with approved lenders—like Veritex Bank—to provide loans. The SBA guarantees a portion of the loan, which reduces the lender’s risk and makes it easier for businesses to qualify for financing they might not otherwise receive.

SBA loans differ from traditional bank loans in a few key ways:

• They are partially guaranteed by the government, which helps reduce risk for lenders.

• They typically offer lower down payments.

• They often will have longer repayment terms, often up to 25 years when real estate is involved.

• SBA loans are designed to support small businesses that may not meet the strict requirements of conventional loans.

In short, SBA loans give small business owners access to capital with more favorable terms than many traditional financing options.

There are several SBA loan programs, each designed for different business needs. The SBA loan programs provided by Veritex Bank Government Lending include:

• SBA 7(a) Loan: The most flexible SBA loan, used for real estate, business acquisitions, working capital, equipment, or refinancing.

• SBA 504 Loan: Primarily used for purchasing fixed assets like commercial real estate or major equipment, often with lower down payments and long terms.

• SBA Express Loan: Offers a faster turnaround time and is typically used for smaller loan amounts (up to $500,000).

• SBA International Trade Loans: Specialized options for seasonal businesses or those expanding globally.

At Veritex Bank, we specialize in SBA 7(a), 504, Express, and International Trade loans—tailored to meet your business’s unique goals.

SBA loan terms vary based on how the funds are used, but they generally offer longer repayment periods than traditional loans—making monthly payments more manageable for small businesses.

Here’s a breakdown:

• Working capital, inventory, or operating expenses:
  Up to 10 years

• Equipment purchases:
  Typically 10 years, depending on the useful life of the equipment

• Real estate purchases or construction:
  Up to 25 years

• Business acquisitions or partner buyouts:
  Usually 7–10 years

To qualify for an SBA loan, your business must:

• Operate for profit in the U.S. or its territories

• Be considered a "small business" by SBA size standards

• Have reasonable owner equity to invest

• Have exhausted other financing options

• Show the ability to repay the loan

Lenders also consider factors like credit history, cash flow, business experience, and collateral. At Veritex Bank, we walk you through the eligibility process to determine the right SBA loan fit for your goals.

Yes, the SBA has guidelines around ineligible businesses. These typically include:

• Businesses engaged in illegal activities

• Gambling or speculation-based enterprises

• Lending institutions

• Businesses primarily involved in passive income (like investment properties)

• Life insurance companies

• Businesses with an owner currently incarcerated or on parole

Veritex Bank can help you determine if your business qualifies based on SBA rules and your industry classification (NAICS code).

Yes! One of the most common uses of an SBA 7(a) loan is business acquisition—including franchises. You can use SBA funds to buy an existing business, purchase a franchise, or even buy out a partner.

At Veritex Bank, we’re experienced in financing multi-unit franchises and independent business transitions, with terms structured around your growth strategy.