Loan Glossary

An SBA loan designed for major fixed assets — commercial real estate and equipment. Structured with a bank (50%), a Certified Development Company (40%), and borrower equity (10%). Max project size: $5.5M+.

The SBA's primary loan program for small businesses. Used for working capital, equipment, real estate, or refinancing. Maximum loan amount: $5 million. Lender is partially guaranteed by the SBA.

A faster SBA loan program with streamlined approval (36-hour turnaround for the SBA response). Max $500,000 for lines of credit or term loans. Carries a higher interest rate than standard 7(a) loans.

The SBA's promise to repay a portion of the loan to the lender if the borrower defaults. The SBA guarantees up to 85% for loans ≤$150K and up to 75% for loans >$150K in the 7(a) program.

SBA loans up to $50,000 for startups and small businesses that need smaller amounts of capital. Provided through nonprofit intermediary lenders, with average loan amounts around $14,000.

Criteria that define whether a business qualifies as "small" for SBA loan eligibility. Based on number of employees or average annual receipts, varying by industry.

A loan secured by a property that already has a primary mortgage. In foreclosure, the first mortgage lender is paid first; the second mortgage is subordinate. Home equity loans are a common type.

Selling a property for less than the outstanding mortgage balance, with the lender's approval. A short sale avoids foreclosure but may result in a deficiency judgment and negatively impact credit.

A commercial property that has reached its expected occupancy level (typically 90%–95%) and generates consistent, predictable income. Stabilized properties qualify for permanent financing.

Financing for businesses with little or no operating history. Options include SBA microloans, business credit cards, CDFI loans, personal loans, or equipment financing. Harder to qualify for without revenue history.

The real estate being purchased or refinanced — the property that serves as collateral for the loan being applied for.