SBA 7(a) Loans up to $500k Now Available

Business Insights

Case Study: Securing an SBA 7(a) Loan After Initial Ineligibility.

Elizabeth Wisniewski
5 Minutes to read
A newity member securing an SBA 7(a) loan after initial ineligibility.
NEWITY's approach to helping small businesses secure SBA 7(a) loans, even with low credit scores.

GCT Company applied for an SBA 7(a) loan through the NEWITY platform. The owner’s credit score did not meet credit requirements for a $150,000 SBA 7(a) loan. However, his goal was securing an SBA 7(a) loan. The owner believed they could improve their credit score, but they needed working capital to keep their business open. NEWITY directed GCT Company to OnDeck, who provided short-term financing. After four months, GCT Company returned to NEWITY with an improved credit score. GCT Company is now an SBA 7(a) loan borrower and refinanced their OnDeck loan as part of the closing process. 

Initial Assessment:

GCT Company, in the application hosting industry, applied for a $150,000 SBA 7(a) loan through the NEWITY platform in early August 2023. GCT Company met initial SBA loan requirements, except for the owner’s credit score, which was below the minimum threshold.  

Tailored Financial Solutions:

As a result, NEWITY could not proceed with GCT Company’s SBA 7(a) loan application. The business owner believed they could significantly improve their credit score, but they needed financing to bridge their capital needs. NEWITY directed the borrower to OnDeck to acquire short-term financing to keep GCT Company’s business open while the owner focused on improving their credit score with the goal of obtaining an SBA 7(a) loan. 

In December 2023, the owner contacted NEWITY, noting they had improved their credit score by paying down debt and limiting their credit use. The owner asked NEWITY to revisit their SBA 7(a) loan eligibility.

Results:

NEWITY quickly re-opened the owner’s SBA loan file. The owner expressed gratitude at NEWITY’s attentiveness and assistance in resuming their application. In the review process, NEWITY helped the owner refinance their OnDeck loan with an SBA 7(a) loan of $250,000. This was a $100,000 increase from the original loan size that the owner had hoped to receive. 

The owner’s $250,000 SBA 7(a) loan was approved at the end of January 2024 and funded in early February. 

Need Small Business Financing?

To qualify for an SBA 7(a) small business loan, your business must be:

  1. U.S.-based and operated
  2. Owner supported / owner funded
  3. Eligible per the SBA’s requirements

Your loan amount will determined by the business’ average annual revenue, FICO score, and years in business