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SBA 7a Versus SBA 504 – Which is Better?
In this video, Beau and Ray talk about the differences between the SBA 7(a) loan program and the SBA 504 loan program.
The SBA 7(a) loan is more streamlined, you can close on it quicker, and there is only ONE approval process.
With the SBA 504 loan, you have two entities to approve: the lender or bank and the SBA. They take longer.
However, pricing on the SBA 504 is usually better.
The SBA 504 has a long prepayment penalty (10 years) whereas the SBA 7a has a shorter prepayment duration (only 3 years).
So clearly, there are differences. Which one you get depends on your specific case, which is why you should strongly consider using a commercial loan advisor who is well-versed in SBA loan programs!