A business expansion loan is a source of capital for successful businesses that are poised to grow. If you have a well-defined strategy for expansion and a proven business model, a business expansion loan could be an ideal fit to evolve your customer base and increase your profits. Investing in your business often requires extra capital to help you reach an untapped market, expand your physical location or generate new streams of revenue. That’s where a lender like Live Oak Bank comes in. We are experts in helping owners like you understand the best way to finance a business expansion.
Varies by product, SBA 7(a) up to $5 million and SBA 504 up to $15 million*
Up to 25 years
Minimal equity injection required
Varies per loan
*We have the ability to fund larger owner-occupied commercial real estate projects with our combination debt financing solution.
From buying commercial real estate to upgrading your equipment and even hiring new team members, an expansion loan can boost your business. Discover the ways we’ve helped our customers achieve more.
Minimal Down Payment
As an established business owner, you are not required to contribute a large amount of cash up front. This means more money in your pocket and solid cash flow for your business.
Attractive Maturity Rates
Depending on how you plan to use your small business expansion loan, you could qualify for a repayment term of up to 25 years. A longer repayment period puts you in a better place to manage your capital.
Interest-Only Payment Period
You’ll have the option of an interest-only period, which is ideal if you’re aiming to increase your cash flow before taking on full payments.
A business expansion loan is a source of capital for successful businesses that are poised to grow. If you have a well-defined strategy for expansion and a proven business model, a business expansion loan could be an ideal fit to evolve your customer base and increase your profits. Investing in your business often requires extra capital to help you reach an untapped market, expand your physical location or generate new streams of revenue. That’s where a lender like Live Oak Bank comes in.
There are many uses for a business expansion loan. Some examples include:
Depending on your specific goals and path to expansion, you have multiple options for expansion loans. SBA expansion loans, including the 7(a) and 504 programs, are designed for established businesses and are based on cash flow analysis. Each SBA loan program has unique benefits and uses, so be sure to speak with your lender to understand the ideal loan type for your goals. SBA loans have specific maximum dollar amounts, so in certain scenarios, lenders may combine it with a conventional loan depending on your capital needs.
As a business owner, it’s crucial to ask yourself the right questions and determine if now is the appropriate time to grow your business. Applying for a loan without a fully baked plan is not a wise idea, so take time to strategize. You’ll need to be sure that you can manage the anticipated growth by addressing the following:
Expansion loans offer flexibility and favorable terms because lenders can easily view the historical performance of the business to make decisions. Because you are an established business (and not a start-up), there are minimum equity injection requirements – which means less cash that you’ll have to put down.
Another benefit is Live Oak’s attractive maturity rate of up to 25 years, plus the construction period. If 51% or more of loan proceeds are used for commercial real estate, including construction and soft costs, the loan qualifies for a 25-year repayment term. If the loan will be used for a combination of purposes, we utilize what’s known as a blended maturity depending on mix of loan proceeds.
Additionally, borrowers can set up an interest reserve for the construction phase of their real estate. A portion of proceeds will be set aside to pay for interest during construction period (i.e. 12 months) so the borrower doesn’t need to worry about payments during that time. An interest-only period is also available, where the borrower pays just the interest on the loan for a set amount of time. This can be helpful for a business looking to ramp up their cash flow before taking on the full principal and interest payments.
Personal Banking & Small Business