SBA 7(a) Loan Program
The SBA 7(a) is the most versatile government-guaranteed loan program available to small businesses. Loan amounts up to $5 million can be used for working capital, equipment purchases, inventory, business acquisitions, debt refinancing, leasehold improvements, and commercial real estate. The SBA guarantees 75% to 85% of the loan (depending on amount), which allows Pinnacle Bank to offer more favorable terms than conventional financing for borrowers who might otherwise not qualify.
Repayment terms extend up to 10 years for working capital and equipment, and up to 25 years for real estate. Down payments are typically 10% to 20%, significantly less than the 25% to 30% required on conventional commercial loans. Variable rates on 7(a) loans are capped by SBA guidelines — currently Prime + 2.75% for loans over $50,000 with terms exceeding 7 years. Fixed rate options are also available and negotiated between the borrower and lender within SBA parameters.
Pinnacle Bank Texas has originated over $180 million in SBA 7(a) loans since receiving Preferred Lender authority. Our SBA team processes applications from initial intake through SBA authorization, closing, and servicing — all in-house, all in Texas.
SBA 504 Loan Program
The 504 program is purpose-built for businesses purchasing or constructing owner-occupied commercial real estate and major equipment. The financing structure combines three sources: a Pinnacle Bank first mortgage (typically 50% of project cost), an SBA-guaranteed debenture from a Certified Development Company (CDC) covering 40%, and the borrower's equity injection of just 10%.
The SBA debenture portion carries a fixed rate set at the quarterly debenture sale — often 0.50% to 1.00% below prevailing conventional rates. Terms on the debenture are 20 or 25 years for real estate and 10 years for equipment, with no balloon and no rate adjustment. This long-term, fully-amortizing structure delivers the lowest possible monthly payment on commercial real estate among all SBA programs.
Eligible projects include purchasing existing buildings, constructing new facilities, renovating or modernizing properties, and purchasing heavy machinery or equipment with a useful life of 10+ years. The business must occupy at least 51% of the property (60% for new construction). Pinnacle Bank coordinates the entire 504 process between the borrower, CDC, and SBA, managing documentation, appraisal, environmental review, and closing logistics.
SBA Express Loans
Need capital fast? SBA Express loans provide up to $500,000 with a 36-hour credit decision from Pinnacle Bank. The Express program uses a simplified application process and reduced documentation requirements compared to standard 7(a) loans, making it ideal for businesses that need working capital, equipment financing, or a revolving line of credit without the extended timeline of a full SBA application.
The SBA guarantees 50% of Express loans (compared to 75-85% on standard 7(a)), which means slightly higher pricing is possible — up to Prime + 4.50% for loans under $50,000 and Prime + 2.75% for larger amounts. However, the speed and simplicity often outweigh the modest rate premium for businesses in time-sensitive situations. Express lines of credit are revolving with 7-year terms, providing ongoing access to capital as your business needs fluctuate.
SBA Microloans
For startups and very small businesses needing under $50,000, the SBA Microloan program provides capital for working capital, inventory, supplies, furniture, fixtures, and equipment. Microloans are administered through SBA-designated intermediary lenders, and Pinnacle Bank can facilitate referrals to approved intermediaries in Texas when a microloan best fits the borrower's needs.
Microloan terms extend up to 6 years with interest rates typically between 8% and 13%, depending on the intermediary lender and borrower qualifications. While Pinnacle Bank does not directly originate microloans, our SBA team evaluates every inquiry to determine whether a microloan, Express loan, or standard 7(a) best serves the borrower's situation.
Who Qualifies for SBA Financing?
SBA eligibility requirements are set by the Small Business Administration and include size standards (varies by industry NAICS code), for-profit status, operation in the United States, owner equity contribution, and demonstration that the borrower cannot obtain conventional financing on reasonable terms. Most Texas businesses with annual revenue under $40 million and fewer than 500 employees meet the size criteria, though specific thresholds vary by industry.
Personal guarantees are required from all owners with 20% or more equity. Collateral is required to the extent available but is not the primary basis for credit approval — the SBA emphasizes cash flow and management capacity over asset coverage. This makes SBA loans particularly attractive for growing businesses that may not have sufficient hard assets to collateralize a conventional loan.
