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NGExpert financial copywriter
Many small businesses turn to the U.S. Small Business Administration (SBA) loan programs for financing when they can’t get funding through other means.
Because the loan programs offer large amounts of money with excellent interest rates and favorable terms, some small businesses may be interested in whether or not they can qualify for more than one loan at a time.
Read on to learn more about getting multiple SBA loans, including how to qualify for an SBA loan and how many you can have.
Page written by Kat Cox. Last reviewed on August 12, 2024. Next review due October 1, 2025.
While the SBA limits the number of Economic Injury Disaster Loans (EIDL) that a small business can get, there’s really nothing that prevents a small business from having multiple SBA loans at a time, including SBA 7(a) loans or SBA 504/CDC loans. As long as a lender will approve your loans, you can almost have as many as you like.
However, it’s important to remember that you should only borrow what you can afford to pay back. At the same time, there may be other limiting factors, such as your business’s ability to meet the eligibility requirements set forth by the SBA and their approved lenders.
In order to qualify for multiple SBA loans, you’ll need to meet the same requirements as you would for a single SBA loan. This includes:
Beyond those basic qualifications, there are others you should be aware of. For instance, you have to demonstrate a strong need for the loan and you must be making the monthly minimum payments on any other SBA loans. Also, you usually can’t use a new SBA loan to pay off an existing SBA loan or other debt (although there are exceptions). Finally, you can’t get more money out of multiple loans than the SBA allows any single business to borrow.
The SBA and their approved lenders have other eligibility requirements for your business before they’ll approve your loan application, whether it’s for your first SBA loan or more. It’s important to check with your lender to see what the specifics are, but you can expect to need to meet the following requirements to get an SBA loan.
As with any loan, a higher credit score can help you qualify for an SBA loan and possibly get better rates and terms. This is because your credit score is the biggest factor in how they gauge your creditworthiness or likelihood of paying back a loan. For most SBA loans, a score of 640 is probably good enough, but if you can aim for a credit score over 690, you’ll be more likely to qualify.
Most SBA loans require collateral and a personal guarantee. You can’t reuse your collateral between loans, which could be a limiting factor in your ability to apply for multiple loans. Collateral can include equipment, inventory or even the business itself.
As previously mentioned, you need to be up-to-date on payments with any existing SBA loans in order to qualify for a new one. But you should also be in good standing on other debts, such as other loans or vendor payments. This may even include your personal debts, such as mortgages, student loans or car payments.
One of the best ways to help your SBA loan application succeed is to have a thorough business plan explaining how you plan to use the funds. This will show the lender how you plan to make enough money to pay back the loan. They’ll want to see your historical and projected finances as well.
Because SBA loans can have repayment terms as long as 25 years, they’ll want to know how likely it is you’ll succeed in business and be able to pay them back in the long run. Of course, having short-term success will be helpful, too.
There are many advantages to getting multiple SBA loans. The first is that SBA loans are very affordable, especially compared to other traditional loans. With long repayment terms and relatively inexpensive interest rates, they’re some of the most popular loans available. Plus, they’re guaranteed by the federal government, which makes them more attractive for lenders, too.
At the same time, getting multiple SBA loans means you can get more money for your business. As long as you don’t exceed SBA limits ($5 million total for SBA 7(a) loans or $5.5 million total for SBA 504/CDC loans), you can get more money to help fund your projects.
Again, you want to make sure you can repay whatever loans you get, no matter how great the rates and terms are. Also, SBA loans can take a long time to fund, and the application process is very involved. So while there are many advantages to getting multiple SBA loans, it’s a good idea to approach the process thoughtfully.
Register online to find the right SBA loan or loans for your business. Just answer a few questions and you’ll be on your way to funding in no time.
Written by
As a B2B finance content specialist, Kat Cox's goal is to distill complicated financial issues into useful information for small business owners, to save them time they could be using to build their companies. Her work has been featured in Forbes and on financial health platform Nav.com. When she's not writing blogs, web copy, or fiction, Kat can be found walking her dog or singing karaoke in Austin, Texas.
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