Long-Term
Capital Architecture.
SBA lending and strategic term loans. The capital structures that define where a business goes — not just where it is.
SBA & Working
Capital Loans.
SBA 7(a) loans provide the most favorable terms available to operator-owned businesses — government-backed guarantees, 10 to 25-year amortization, and rates that no short-term product can match.
SCS structures the intermediate step that makes SBA eligibility possible. Advances themselves are not SBA-refinanceable. A conventional amortizing facility is, once it has been current for twelve months.
SBA 7(a) terms and specifications
| SBA Range | $50,000 — $5,000,000 |
|---|---|
| Term | Up to 10 years (working capital), 25 years (real estate) |
| Rate | Variable, tied to the Prime Rate and capped by SBA program rules — set by the lender at underwriting |
| Close Speed | 30 — 90 days |
| Minimum Credit | 680 (preferred 700+) |
| DSCR Minimum | 1.25x global cash flow |
Strategic
Term Loans.
Custom mid-to-long term debt for operators with complex capital needs. Fully unsecured structures with no UCC filing. No EBITDA minimums. Cash flow negative companies may qualify.
Strategic term loans serve acquisition capital, growth capital, special situations, and CPG lines. They are the whale-tier product for operators who have outgrown conventional structures.
Strategic term loan terms and specifications
| Range | $250,000 — $50,000,000 |
|---|---|
| Structure | Fully unsecured available — no UCC |
| EBITDA Minimum | None (cash flow negative eligible) |
| Covenants | No financial covenants |
| Close Speed | 3 days (subordinate) — 30 days (LOC) |
| Min Annual Revenue | $3,000,000+ |
Advances cannot be
refinanced into an SBA loan.
SBA Standard Operating Procedure 50 10 8, effective 1 June 2025, prohibits using SBA 7(a) or 504 loan proceeds to refinance a merchant cash advance or a factoring agreement. That is a rule change, and it is the reason the order of operations matters more than it used to.
Conventional amortizing term debt is still refinanceable. So the route to an SBA facility runs through one, and the timing is not optional.
The debt being refinanced must have been current for at least the preceding twelve months. No late payments, no restructures inside that window. This is why the intermediate facility has to be put in place well before the SBA conversation begins — the clock starts when that facility does.
The new SBA loan must reduce the installment payment on the refinanced debt by at least ten percent. Structuring the intermediate facility without that end state in mind is how operators arrive at the SBA stage and find they do not qualify.
Bridge Liquidity, then a conventional amortizing facility, then twelve months of clean payment history, then SBA 7(a). Each step is a prerequisite for the next.
One clarification worth stating plainly, because it is widely misunderstood: an SBA loan may fund eligible purposes — equipment, real estate, working capital — and the resulting improvement in operating cash flow can help a business retire advances from its own revenue. That is not the same as SBA proceeds paying off an advance, which is not permitted. SCS will not represent it otherwise.
Eligibility is determined by the lender and by SBA Standard Operating Procedures in force at the time of application. Program rules change.
Long-term capital,
answered directly.
What are the terms on an SBA 7(a) loan?
SBA 7(a) loans run from $50,000 to $5,000,000, with terms up to 10 years for working capital and 25 years for real estate.
Rates are variable, tied to the Prime Rate and capped by SBA program rules, and the final rate is set by the lender at underwriting based on your profile — SCS does not quote a rate before a file is reviewed. These are the most favorable terms available to operator-owned businesses, backed by a government guarantee that no short-term product can match.
How long does an SBA loan take to close?
SBA facilities close in 30 to 90 days.
The timeline is longer than Bridge Liquidity because the underwriting is deeper, which is also why the resulting terms last 10 to 25 years instead of 3 to 18 months.
What credit and cash flow are required?
The minimum credit score is 680, with 700 or above preferred, and global cash flow must support a debt service coverage ratio of at least 1.25x.
Profiles that fall short today are candidates for a structured path toward eligibility rather than an outright decline — typically a conventional amortizing facility held current for twelve months.
What is a strategic term loan?
A strategic term loan is custom mid-to-long term debt from $250,000 to $50,000,000 for operators with complex capital needs.
Fully unsecured structures are available with no UCC filing, no financial covenants, and no EBITDA minimum. Minimum annual revenue is $3,000,000.
How fast can a strategic term loan close?
Strategic term structures close in as little as 3 days for subordinate positions and up to 30 days for a line of credit.
They serve acquisition capital, growth capital, special situations, and CPG lines.
Can an SBA loan refinance a merchant cash advance?
No. Under SBA SOP 50 10 8, effective June 1, 2025, SBA 7(a) and 504 loan proceeds cannot be used to refinance merchant cash advances or factoring agreements.
Conventional amortizing term debt does remain eligible for SBA refinancing, subject to two tests: the debt must have been current for at least the preceding 12 months, and the new SBA loan must reduce the installment payment by at least 10%. The workable sequence is Bridge Liquidity, then a conventional amortizing facility, then twelve months of seasoning, then SBA 7(a). An SBA loan can also fund eligible purposes such as equipment, real estate, or working capital, which improves operating cash flow the business can then use to retire advances from revenue.
Most Bridge clients can
become SBA candidates.
The path runs through a conventional amortizing facility first. SCS tracks every funded client's paydown timeline and eligibility indicators, and initiates the conversation when the window opens — before the client has to ask. Because SCS does not fund deals, the sequence we recommend is the one the analysis supports, not the one that fits an inventory.
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