Access to capital is essential for small business growth. In 2024, the SBA facilitated over 70,000 7(a) loans, the highest in 15 years. Brian Fernandez, SBA commercial loan officer at Midwest Regional Bank, joins us on the latest episode of The Small Business Show to explain how these loans bridge the gap between traditional lending and the needs of small business owners.
SBA 7(a) loans offer flexible financing tailored to different business needs, including owner-occupied real estate purchases and renovations, equipment financing, startups, business acquisitions, and franchises. Longer loan terms, sometimes up to 25 years for real estate, help reduce monthly payments, while lower down payment requirements ease upfront costs.
"The SBA 7(a) is great because 75 to 85 % is covered."
With over 25 years of banking experience, Fernandez acts as a small business consultant, helping clients navigate the loan process and structure deals creatively. His collaborative approach focuses on understanding the full financial picture to increase loan approval chances and build long-term client relationships.
To prepare for SBA financing, business owners should clearly define their funding needs, develop a repayment plan, and have financial documents like tax returns and projections ready. Starting early is important, especially for purchases with long lead times. Applying for lines of credit before funds are urgently needed can improve approval odds.
SBA loans typically prefer a credit score of around 680, but they can accommodate lower scores when valid business circumstances apply. Cash reserves covering six to 12 months of expenses are ideal, though flexibility exists depending on the overall financial plan.
For business acquisitions, lenders review the target company’s financial health over recent years. Accurate bookkeeping and profitability records are critical for approval and future resale value.
Midwest Regional Bank, with over $450 million in assets and operations in eight states, consistently ranks among the top 50 SBA lenders nationwide. Fernandez represents the bank in Florida and focuses on proactive outreach and client support.
Despite economic challenges, SBA 7(a) loans remain a viable option for startups and established businesses seeking manageable terms and lower down payments. Small business owners can improve their chances of success by organizing their financial documents, carefully planning repayments, and starting the loan application process early.
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