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504 vs SBA 7(a) Loans

Many commercial lenders who talk about SBA financing or options with low down payments will only mention SBA 7(a) loans, neglecting the SBA 504 loan program (aka the SmartChoice® Commercial Loan) altogether.

There is a very good reason for this: 7(a) loans are in their better interest, even if it isn’t beneficial for the small business owner taking out the loan. The 7(a) loan is a good and helpful tool for small businesses, but it wasn’t designed to finance commercial property. The SmartChoice® Commercial Loan was. Watch the video below to hear more about this problem from Chris, our CEO and Cofounder:

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For more insight, read the following article from the Wall Street Journal. Though it’s a few years old, the same problems still exist today.

SBA Loan Program Remains Little Known and Underused. Potential Funds Remain in 504, While Other Plan Runs Short Too Quickly.