Our Loan Products
Small businesses generally have three primary options when it comes to financing real estate and fixed assets for their business. Two of the options are SBA programs (504 & 7a) and the third is a conventional loan from a bank.
Below is a basic analysis of each of our loan products. Note that we offer small dollar loans ($5K – $50K) and financial education through our Certified CDFI, Lending Avenue®. Follow the link below to read more below about what we have to offer.
SBA 504 Loan
An SBA 504 Loan is typically used for fixed-asset financing: real estate, renovations, business acquisition (assets only), heavy equipment, or debt refinance.
Loan Structure:
- Non-SBA Loan: From a bank or another commercial lender, which will have the senior collateral position. For projects involving special purpose property or a start-up business, this loan must equal 50% or more of the total project.
- CDC/SBA Debenture Loan: Will have a junior collateral position. This amount may never exceed 40% of the total project.
- Borrower Contribution: May be borrowed if the terms meet certain criteria. The base contribution requirement starts at 10% of the total project but increases by 5% for projects that involve special purpose real estate or a start-up business, for up to a total contribution of 20% of the total project. In certain cases (for example a collateral shortfall), the requirement could exceed 20%.
Typical SBA Loan Size: $250K – $5.0MM; the upper limit is $5.5MM for manufacturers and projects that include renewable energy sources that meet specific requirements (please contact a Regional Manager for more information)
Interest Rate: Fixed, based on SBA debenture rate and fees on the date of funding
Businesses in operation for 2 or more years can also use 504 loans to refinance existing debt that meets certain criteria.
SBA 7(a) Community Advantage
The SBA 7(a) Community Advantage is a smaller loan product that could be used for any of the same purposes as the 504, but can additionally be used for purposes such as:
- Working capital
- Inventory
- Supplies and raw materials
- Payoff / consolidation of unsecured debt
- Business acquisition (stock / goodwill)
This program is a subset of the primary 7(a) program, designed for easier access to capital.
- SBA guarantees up to 85% of the total loan amount
- Generally provides longer terms than conventional loans
- Complimentary consultation
Loan Structure: One loan from GTCC, with 75-85% of total loan amount guaranteed by SBA.
Typical Loan Size:
GTCC capped at $150K, program max of $350K
Interest Rate: Variable or fixed; negotiated with lender (GTCC), subject to SBA maximums
CDFI Small Business Loans
Our CDFI subsidiary, Lending Avenue®, offers flexible financing for underserved small businesses, startups, or community projects, including loans for:
- Start-up costs
- Equipment
- Supplies
- Leasehold Improvements
- Inventory
- Working Capital
Whether you have limited credit, collateral or experience, we’ll work with you to find funding that allows you to build your credit and improve your finances.
We also provide technical assistance and financial education to better position your company for growth and future financing.
Though we are focused on serving East Texas, we are able to lend outside of this area.
Typical Loan Size: $5K – $50K
Interest Rate: Flexible; typically higher than SBA but lower than alternative lenders
The GTCC Advantage
Our Management Team has over 80 years of combined experience providing SBA loan services, helping hundreds of small businesses.
We are readily available to assist with every aspect of your qualification, application approval, and funding process.
We have thirty years' experience working with the SBA, and we now also offer the 7(a) Community Advantage loan product.
