Small contractors face a unique set of challenges when it comes to growing their business—tight cash flow, seasonal fluctuations, equipment needs, and limited access to capital. That’s where SBA loans can step in and make a significant difference.
At Union Savings Bank, we understand the local market and the needs of contractors better than most. We work with small business owners every day to help them navigate their financing options, and SBA loans for contractors continue to be one of the most valuable tools available.
What Is an SBA Loan?
An SBA loan is a small business loan partially guaranteed by the U.S. Small Business Administration. The SBA works with approved lenders—like Union Savings Bank—to provide funding to small businesses that might not qualify for traditional loans.
SBA loans don’t come directly from the government. Instead, they’re issued by trusted lenders, with the SBA providing a guarantee that reduces risk for the lender and makes financing more accessible for the borrower.
Why SBA Loans Are a Game-Changer for Contractors
For small contractors, securing affordable financing can often be a roadblock to expansion. Here are several benefits of SBA loans that make them a smart option:
- Lower Down Payments and Flexible Terms: SBA loans typically require lower down payments than conventional loans—often as low as 10%. With extended repayment terms (sometimes up to 25 years for real estate and 10 years for equipment or working capital), monthly payments are more manageable, improving cash flow.
- Competitive Interest Rates: Because the SBA backs a portion of the loan, lenders are able to offer lower, more competitive interest rates compared to non-SBA options. That means more of your money stays in your business.
- Funding for a Wide Range of Needs: Whether you need to purchase new equipment, hire staff for a big project, refinance high-interest debt, or stabilize cash flow during slower seasons, SBA loans can be used to support a wide variety of business needs.
- Easier Qualification for New or Growing Businesses: Many contractors run into obstacles when they don’t have years of financial history or collateral. SBA loans help reduce that barrier by giving lenders added confidence in financing newer businesses or those with less traditional financial profiles.
Types of SBA Loans Contractors Use Most
While there are several SBA loan programs, here are two of the most common used by small contractors:
SBA 7(a) Loan: The most popular option, ideal for working capital, equipment purchases, or buying out a partner.
SBA 504 Loan: Great for financing large equipment or purchasing owner-occupied commercial real estate with a low down payment.
Why Work with a Community Bank?
Choosing a local lender for your SBA loan gives you the advantage of personalized service and local expertise. At Union Savings Bank, we take the time to understand your business goals, walk you through the SBA application process, and help you find the loan structure that fits your needs.
We’re not just here to lend—we’re here to build long-term relationships that support your success.
Grow Your Contracting Business with USB
Whether you’re ready to expand your team, invest in equipment, or take on larger projects, Union Savings Bank’s Business Lending team is here to help. Our experienced lenders are committed to helping local contractors access the financing they need to grow with confidence. Learn more.
All loans and lines are subject to credit approval.
