TL:DR
The Small Business Administration doesn't lend money directly to operating businesses (the only exception is disaster loans). What they do is guarantee up to 85% of your loan against default, which makes participating banks willing to write loans they otherwise wouldn't. That guarantee is why SBA loans have lower rates, longer terms, and lower down payments than conventional bank loans. But the SBA itself doesn't approve of you, the bank does. And as Marie Askew, VP of SBA Lending at Live Oak Bank, told us: 55% of applications get denied, and a surprising amount of that is on the packaging. Frank packages and submits to the right SBA bank for your specific deal.
The four SBA programs you need to know
The SBA runs several programs, but four matter for most trade and services operators.
The flagship program. Loans up to $5 million for almost any legitimate business purpose: working capital, equipment, debt refinancing, business acquisitions, real estate, and more. Terms up to 10 years for working capital and equipment, up to 25 years for real estate. Rates tied to Prime — typically Prime + 2.25% to 4.75%, putting effective APRs around 9.75% to 14.75% in current rate environments.
Best for: Most general-purpose financing needs, business acquisitions, working capital expansion, equipment purchases that can't be financed cleaner elsewhere.
Long-term, fixed-rate financing specifically for owner-occupied commercial real estate and major equipment. Up to $5.5 million in SBA participation (combined with bank financing, total deal size can exceed $10M). Terms of 10, 20, or 25 years. The CDC fixed-rate portion currently sits at 5-7%.
Best for: Buying your shop, yard, warehouse, office, or any owner-occupied commercial property. This is the wealth-building move every $2M+ trade operator should be looking at — stop paying rent on space your business uses, own the building, build equity, lease it back to your business.
A faster sub-program of 7(a). Loan amounts up to $500,000 with quicker turnaround. Lower SBA guarantee (50% instead of 75-85%), so banks are pickier — but the timeline is days/weeks instead of weeks/months.
Best for: Smaller working capital needs or equipment purchases where you need real bank rates without the full 7(a) timeline.
Loans of $50,000 or less, delivered through nonprofit intermediary lenders. Often used for inventory, supplies, equipment, or working capital for very small businesses or startups.
Best for: Newer operators who need a small amount of capital and don't yet qualify for a 7(a). Most established trade operators should focus on 7(a) and 504.
Other Frank-brokered products - Not SBA, but worth knowing
SBA isn't the only path Frank brokers. Depending on your need, one of these might fit better:
Conventional bank term loans (from 6% APR)
Standard business term loans without SBA backing. Lower rates than online lenders, faster than SBA, but require stronger credit and financials. $25K-$5M typical.
Bank lines of credit (from 7.20% APR)
Revolving credit for working capital. Lower rates than online LOCs (Bluevine, Fundbox, OnDeck range from 14-99%). Up to $5M.
Equipment financing (from 6% APR)
Specifically for fleet, install equipment, manufacturing equipment, or major fixed assets. Equipment is the collateral. 5-10 year terms typical.
Invoice financing (from 1% per period)
Working capital advanced against your unpaid invoices. For trade businesses with B2B/B2G customers and 30-90 day payment terms, this is often the cheapest, fastest source of cash. Frank brokers it from 1% per period — vastly cheaper than the 1-5% per period most factoring companies charge.
Who actually lends you the money?
The SBA program runs through participating banks and lenders, broadly grouped into three tiers:
SBA Preferred Lenders can approve SBA loans without sending the file to the SBA for review (the SBA pre-approves the lender's authority). These banks process SBA loans fastest. Live Oak Bank is the #1 SBA lender in America by dollar volume. Other major preferred lenders include Wells Fargo, U.S. Bank, Newtek, Huntington, and dozens of regional banks.
SBA Certified Lenders have been certified by the SBA but still need to send larger loans for SBA review. Slower than preferred, but the bank still has significant authority.
General SBA Participating Lenders can issue SBA loans but every loan goes through SBA review. Slowest tier.
The implication: the bank you choose matters enormously. The same SBA loan request can take 13 days at one preferred lender and 90+ days at a general participating lender. Choosing the right bank for your specific industry and deal size is half the battle. Frank's role is to know which preferred lenders are actively funding deals like yours and route your application accordingly.
Most industries; some restrictions (gambling, lending, speculative real estate, etc.)
The SBA also has size standards — your business must be considered "small" by SBA definition. For most trade and services businesses, this isn't a constraint until you're well over $20M in revenue.
Why 55% of applicants get denied
In our recent podcast episode with Marie Askew, VP of SBA Lending at Live Oak Bank, we got the actual breakdown of what kills applications. The Federal Reserve's credit survey shows that at least 55% of SBA applications get denied. A lot of that is on the numbers. A surprising amount is on the packaging.
The most common reasons applications die:
1. Add-backs without documentation. Sellers writing off "their entire life" through the business. Personal vehicles, family trips, household expenses. The bank can't verify which expenses are genuinely business-related, so they remove all of them — which often kills the cash flow case for the loan.
2. Skeletons surfaced too late. A bankruptcy from college, an arrest record, a tax lien — operators withhold these because they're embarrassed or hopeful. The bank pulls the record anyway and the deal dies in week eight instead of week one. Surface everything in week one.
3. Customer concentration above 20%. If one customer is more than 20% of your revenue, banks treat it as a red flag. If your top three customers are 50%+, even worse. The deal isn't dead — but it requires a stronger seller carry note and more justification.
4. Disorganized financials. Tax returns that don't match P&Ls. Bank statements that don't reconcile. Affiliates and holding companies without a clean ownership map. Banks underwrite the deal they can see — and a messy file gets underwritten as a messy business.
5. Wrong industry experience. SBA loans for business acquisitions require relevant industry experience. "I'm a software guy buying a landscaping business" without a transition plan or operations partner gets declined.
6. Slow responsiveness. Banks send a document checklist. Operators take three weeks to return signed forms. The deal stalls. Time kills deals — preparedness equals speed.
The fix for all six is the same: package the file properly, surface everything early, choose the right bank, respond fast. That's what brokers do.
SBA Timeline - What to expect
Stage
6-12 weeks typical, 13 days fastest, 6 months in worst cases
The SBA isn't fast. If you need money in 72 hours, Frank brokers conventional bank term loans, lines of credit, and invoice financing that can fund that quickly — but for SBA specifically, plan for 6-12 weeks. The trade-off is rate and term: SBA 504 from 5% APR over 25 years is unbeatable for owner-occupied real estate.
When SBA is the right call
SBA loans aren't for everyone. They're the right call when:
You're buying real estate. SBA 504 for owner-occupied commercial property is the single best wealth-building move available to trade operators. From 5% APR. Lower down payment than conventional commercial mortgages (10% vs. 25-30%), longer amortization (25 years), fixed rates. If you're paying rent on your shop or yard, you're handing equity to your landlord. SBA 504 stops that.
You're buying a competitor. SBA 7(a) loans up to $5M can finance business acquisitions with 10% buyer down payment, often supplemented by seller carry notes. From 9.75% APR. The boomer-owned business succession wave is creating an enormous acquisition opportunity for trade operators.
You need long-term equipment financing. Major fleet purchases, manufacturing equipment, install rigs — anything with a 7-15 year useful life. SBA 7(a) terms of 10 years let you amortize the cost over the equipment's life rather than crushing your cash flow with 24-month online lender terms.
You're refinancing expensive debt. If you're stuck in an MCA, RBF, or high-rate online loan, an SBA 7(a) can refinance and restructure the debt at significantly lower rates and longer terms. Operators routinely save five and six figures per year through SBA refinancing.
When SBA isn't the right call, but Frank still is
You need money in 72 hours. SBA can't deliver that — but Frank can broker conventional bank term loans, bank lines of credit, or invoice financing that funds in as fast as 72 hours. Same Frank process. Different product.
The deal is small. For loans under $50K, SBA paperwork burden often isn't worth it. Use a conventional bank term loan or LOC through Frank.
You don't qualify for SBA yet. If you're under 12 months in business or under 640 FICO, SBA approval is unlikely. Build the business another 6-12 months and reapply — or use Frank's other products in the meantime.
How Frank gets you an SBA Loan
Frank's role in the SBA process is what bankers call "loan packaging" — but executed by people who understand trade and services operators specifically.
1. Free pre-approval (3 minutes). We review your financials, FICO, time in business, and use of funds. We tell you honestly whether you have a real shot at SBA approval, and if so, with which banks.
2. Bank selection. We choose the SBA preferred lender most likely to fund your specific deal, based on industry, geography, deal size, and the bank's current appetite. The same loan can be approved at one bank and denied at another. Choosing right is half the work.
3. Application packaging. We help you assemble the documents banks actually need: tax returns, bank statements, affiliate financials, business plans for acquisitions, transition plans, add-back schedules, customer concentration analyses. The kind of file that gets approved.
4. Submission and management. We submit on your behalf and stay in the loop with the underwriter throughout the process. If the bank comes back with conditions or questions, we handle them — quickly.
5. Closing. Insurance binders, life insurance assignments, UCC filings, personal guarantee paperwork, escrow setup. We coordinate all of it so closing happens on schedule.
The cost to you: $0. Frank is paid by the bank when the loan closes. We never charge borrowers a fee.
FAQ
Does the SBA approve my loan or does the bank? The bank approves your loan. The SBA's role is to guarantee a portion of the loan against default, which makes the bank willing to lend. Some banks (SBA Preferred Lenders) have authority to issue SBA-backed loans without sending each one to the SBA for review.
What's the difference between SBA 7(a) and SBA 504? 7(a) is general-purpose — working capital, equipment, acquisitions, real estate, refinancing. 504 is specifically for owner-occupied commercial real estate and major equipment purchases. 504 has lower down payment requirements and longer fixed-rate terms (rates from 5% APR vs. 9.75% APR for 7a).
Can I get an SBA loan as a sole proprietor? Yes. SBA loans are available to sole proprietors, LLCs, partnerships, and corporations.
How much down payment do I need? For business acquisitions: 10% from the buyer is the minimum (often supplemented by seller carry notes). For real estate via 504: 10% buyer down payment is typical. For working capital or equipment: no down payment required.
Can I use an SBA loan to buy a competitor? Yes. SBA 7(a) loans up to $5M can finance business acquisitions. This is one of the most common current use cases — particularly for trade operators executing on the boomer business succession wave.
Will my personal guarantee be required? For owners with 20%+ equity, yes. The personal guarantee is a near-universal requirement on SBA loans.
What if I have a bankruptcy or arrest record? Disclosed early, often not disqualifying. Disclosed late, almost always fatal to the deal. The single most important rule on SBA applications: surface everything in week one.
Can I refinance an existing SBA loan? Yes, particularly if rates have dropped meaningfully or you're consolidating multiple loans. SBA 7(a) refinancing is its own sub-process.
Does Frank charge me anything? No. Frank is paid by the bank when your loan closes. Our incentive is aligned with closing real bank loans, which is why we don't broker MCAs, RBFs, or short-term high-cost products.
How fast can I really get an SBA loan? 13 days at the absolute fastest (preferred lender, clean file, simple deal, prepared borrower). 6-12 weeks is typical. 6 months in the worst cases. If you need money faster, Frank brokers conventional bank term loans, lines of credit, and invoice financing that fund in as fast as 72 hours.
What other products does Frank broker besides SBA? Conventional bank term loans (from 6% APR), bank lines of credit (from 7.20% APR), equipment financing (from 6% APR), and invoice financing (from 1% per period). Pre-approval for all of them is 3 minutes.
The SBA isn't the lender. The bank is. Frank knows which banks are actively funding trade operators right now.
Frank pre-qualifies you in 3 minutes — for SBA financing, conventional bank loans, lines of credit, equipment financing, or invoice financing. If you're a real candidate for SBA, we'll route you to the SBA preferred lender most likely to fund your deal. If a different product fits better, we'll tell you. $0 fees, ever.