Massachusetts SBA Loans


Massachusetts SBA Loans: A Helpful Guide for Small Businesses

Hey there! If you’re a small business owner in Massachusetts looking into SBA loans, you’ve come to the right place. I’m here to give you the lowdown on these government-backed loans in a simple, easy-to-understand way. I get it – loans and financing can be confusing and intimidating. But it doesn‘t have to be! Stick with me and I’ll walk you through everything you need to know.

What is the SBA?

First things first – what exactly is the SBA? It stands for the Small Business Administration, which is a federal government agency that helps entrepreneurs and small business owners. The SBA doesn’t actually lend money directly to businesses. Instead, it sets guidelines for loans and guarantees them to banks and lenders. This helps provide funding to small businesses who might not qualify for traditional financing.

What types of SBA loans are available in Massachusetts?

There are a few main types of SBA loans available:

  • 7(a) Loans: The most common type of SBA loan. Can be used for working capital, equipment, or real estate. Max loan is $5 million.
  • 504 Loans: For purchasing real estate or equipment. Max loan is $5.5 million.
  • Microloans: Small (up to $50,000) loans provided through non-profit lenders. Helpful for startups.
  • Disaster Loans: Provided to businesses in declared disaster areas. Currently available in parts of Massachusetts due to 2022 drought.

The most popular options for small businesses are the 7(a) and 504 loans. I’ll explain more about these two below.

7(a) Loans

The 7(a) loan program is the SBA’s primary loan program. It provides loan guarantees up to $5 million for working capital and other business expenses.


  • Purchase equipment, machinery, furniture
  • Acquire land or buildings
  • Expand or renovate facilities
  • Working capital
  • Refinance existing debt

Key Benefits

  • Up to 85% financing guaranteed by the SBA
  • Flexible repayment terms up to 10 years for working capital, up to 25 years for real estate
  • Competitive interest rates

This is a great option if you need a sizable loan for major business expenses. The SBA guarantee gives lenders more confidence in lending to small businesses.

504 Loans

504 loans are for purchasing fixed assets like real estate or equipment. The max loan is $5.5 million.


  • Purchase land or existing buildings
  • Construct new facilities
  • Expand or modernize buildings
  • Acquire long-term equipment

Key Benefits

  • Financing up to 90% of project costs
  • Below market fixed interest rates
  • Long repayment terms – 10 or 20 years

The 504 loan involves three parties – you, a lender, and a certified development company. This spreads out the risk and allows for better loan terms.

SBA Disaster Loans

When an area in Massachusetts is declared a disaster zone by the SBA, low-interest federal disaster loans become available to affected businesses.For example, parts of Massachusetts were declared a drought disaster area in 2022. Small businesses in these counties can apply for working capital loans up to $2 million at low interest rates.

Who is eligible for SBA loans in MA?

To qualify for SBA loans in Massachusetts, your business must:

  • Be located in the USA
  • Be a for-profit business
  • Meet the SBA size standards for your industry
  • Have a good credit score
  • Show the ability to repay the loan

Non-profit organizations may also be eligible in some cases. Talk to your lender about specific requirements.

What is the process of getting an SBA loan?

Here are the basic steps to get an SBA-backed loan:

  1. Find an SBA approved lender. There are many lenders in MA that participate.
  2. Submit your loan application and required documents. This includes financial statements, business plan, personal financials, collateral info, and details on the loan purpose.
  3. The lender will review your application and give you a decision. If they approve, they will send the application to the SBA.
  4. The SBA reviews and provides a final approval. This can take 2-3 weeks.
  5. After SBA approval, you can close on the loan and receive the funds!

It’s a thorough process, but worth it for the great loan terms. Having an experienced lender guide you through it makes things much smoother.

Tips for getting approved

Here are some tips to boost your chances of getting approved:

  • Have excellent personal and business credit scores above 680. This shows responsibility.
  • Be prepared with financial records, projections, and a solid business plan. Thorough documentation is key.
  • Put down as much collateral as possible – both business and personal assets. This reduces risk for the lenders.
  • Explain clearly how the loan will grow your business. Show how you’ll be able to repay it.
  • Apply with an SBA preferred lender who can guide you through the process. Their expertise is invaluable!

Finding an SBA lender in Massachusetts

There are many lenders to choose from who offer SBA loans in MA. Here are a few top options:

I suggest shopping around and comparing options from multiple lenders. Each will have different terms, rates, and offerings. Find one that best aligns with your business needs.

What documents do you need to apply?

When applying for SBA loans, you’ll need to provide some key documents. Having these ready will make the process faster and easier:

  • Several years of business and personal tax returns
  • Business financial statements for the last 3 years
  • Personal financial statement
  • Projections and forecasts
  • Business plan
  • Debt schedule
  • Collateral details
  • Ownership agreements if applicable
  • Franchise documents if applicable
  • Resumes of key managers
  • Business licenses and permits

It looks like a lot, but your lender will let you know exactly what they need to see. Better to be over prepared!

Pros and cons of SBA loans

Like any financing option, SBA loans come with both advantages and potential drawbacks:Pros

  • Low down payments, often just 10%
  • Lower monthly payments than conventional loans
  • Long repayment terms up to 25 years
  • Fixed interest rates as low as 2.375%
  • No balloon payments
  • Prepayment penalties waived in many cases


  • High upfront fees of 2-3% of the loan amount
  • Strict eligibility and approval requirements
  • Time consuming application process
  • Requires good personal credit history
  • Extensive documentation is required
  • The SBA has veto power over your loan

As you can see, the pros generally outweigh the cons for most small businesses!

Alternatives to explore

If an SBA loan doesn’t end up being the right fit, here are a few alternative financing options to look into:

  • Traditional bank term loans or lines of credit
  • Equipment financing
  • 401(k) business financing
  • Merchant cash advances
  • Invoice factoring
  • Angel investors or venture capital
  • Crowdfunding

Don’t limit yourself! Talk to both online and local lenders to find the best funding mix.

Let us help you get funded!

As you can see, SBA loans provide awesome long-term financing, but the process can be complex. The good news is, you don’t have to do it alone!

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

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