How Michigan's Highest-Value Industries Secure SBA Financing in 2026: A Complete Guide for Business Owners

If you own a manufacturing plant in Sterling Heights, operate a chain of urgent care clinics in Grand Rapids, or run a successful excavation company serving Metro Detroit, you already know that accessing growth capital in Michigan isn't as simple as walking into your local bank.

The reality? Michigan's most valuable business sectors—from tool & die shops to dental practices, from concrete contractors to automotive care facilities—face a frustrating paradox: They generate strong revenue, maintain real operations, and represent the backbone of Michigan's $600 billion economy. Yet when it comes to securing the $500K to $5M in financing needed to acquire a competitor, purchase commercial real estate, or fund a major expansion, most business owners hit the same wall.

Chase says no. Huntington says no. Even your longtime community bank—the one that's handled your business checking for a decade—says no.

Here's what 20+ years facilitating SBA loans for Michigan businesses has taught us: Getting approved for SBA financing has almost nothing to do with whether your business qualifies. It has everything to do with matching your specific business profile with the right lender from a network most Michigan business owners don't even know exists.

This comprehensive guide breaks down exactly how Michigan's most capital-intensive industries—the ones building real value, creating jobs, and driving economic growth—can successfully navigate SBA financing in 2026.

Why Michigan's High-Value Industries Need SBA Loans (And Why Traditional Banks Keep Saying No)

The Michigan Business Financing Gap

Michigan's economy runs on businesses exactly like yours. According to the latest SBA data:

886,557 small businesses operate in Michigan, representing 99.6% of all Michigan businesses. These businesses employ 1.8 million Michiganders—44.7% of the state's workforce. In Q2 2025 alone, $200+ million in SBA loans were approved with an average loan size of $526,749 and an average interest rate of 9.6% (down from 10.5% in 2024).

Yet here's the disconnect: The industries creating the most value and employing the most Michigan workers face the highest barriers to traditional financing.

The Real Reason Banks Decline Your SBA Loan Application

Let's be brutally honest about what's happening when you apply for SBA financing at major banks:

Big Banks Cherry-Pick Only "Perfect" Deals

Chase, Wells Fargo, PNC, and other mega-banks want 780+ credit scores (yours is 690—completely financeable, but not "perfect"), 5+ years of flawless financials (you had one rough year during COVID), massive collateral cushion (your equipment is valuable but specialized), and industries they "understand" (they don't understand tool & die, remediation, or managed IT services).

They turn down 8 out of 10 SBA applications. That 20% approval rate isn't because businesses don't qualify—it's because big banks only want the easiest deals.

Community Banks Lack Specialized Lending Capacity

Your local Michigan credit union wants to help. Their loan officer genuinely believes in your business. But they have limited capital to deploy on larger loans ($1M+), don't specialize in complex SBA structures (504 loans, business acquisitions, multi-property deals), can't compete with specialized lenders' rate pricing, and often lack experience in capital-intensive industries like manufacturing, healthcare, or government contracting.

Most Business Owners Waste 60-90 Days Going Bank-to-Bank

The typical Michigan business owner contacts 15-20 different lenders, fills out the same application repeatedly, submits the same documents over and over, gets declined for reasons they don't understand, and gives up, thinking they "don't qualify."

The truth: You probably do qualify. You just haven't found the right lender for your specific situation.

The Industries We Specialize In: Michigan's High-Value Business Sectors

Over two decades facilitating $1+ billion in business financing, we've developed deep expertise in Michigan's most capital-intensive and valuable industries. These aren't businesses looking for $50K working capital lines. These are established operations seeking $500K to $5M+ to fund meaningful growth.

Manufacturing & Industrial Operations

Industries We Serve: Automotive parts suppliers and tier 1/2/3 manufacturers, tool & die shops, metal fabrication and machining, injection molding and plastics manufacturing, CNC machining operations, industrial equipment manufacturing, food processing and packaging, and custom manufacturing operations.

Why SBA Loans Work for Michigan Manufacturers:

Michigan manufacturing businesses face unique financing challenges. Your equipment is highly specialized—a $2M injection molding machine or custom CNC equipment has tremendous value to your operation but limited value to a bank's liquidation department. Traditional lenders don't understand this. SBA lenders who specialize in manufacturing do.

Recent Success Stories: $2.8M SBA 504 loan for Sterling Heights metal fabricator purchasing 45,000 sq ft facility + new CNC equipment. $1.4M SBA 7(a) loan for Grand Rapids injection molding company acquiring competitor. $3.2M USDA B&I loan for rural Michigan food processing expansion creating 28 jobs.

Common Use Cases: Acquiring established manufacturing businesses, purchasing industrial facilities (50,000+ sq ft operations), financing specialized equipment ($500K+ machinery), consolidating multiple manufacturing locations, and funding expansion into new product lines.

Medical & Dental Practices

Industries We Serve: Multi-provider physician practices (family medicine, internal medicine, specialty practices), dental practices and dental service organizations (DSOs), urgent care clinics, surgical centers and specialty clinics, veterinary practices and animal hospitals, physical therapy and rehabilitation centers, chiropractic offices, and home health care agencies.

Why SBA Loans Work for Michigan Healthcare Providers:

Healthcare practices generate predictable revenue through established patient bases and insurance contracts. Yet traditional banks struggle to finance healthcare acquisitions due to goodwill and intangible asset valuations, complex partnership structures, equipment with limited resale value, and regulatory concerns they don't understand. SBA lenders specializing in healthcare understand practice valuations, cash flow analysis, and industry-specific risk factors.

Recent Success Stories: $1.8M SBA 7(a) loan for Ann Arbor dental practice acquisition (4-provider DSO expansion). $950K SBA 504 loan for Lansing urgent care purchasing 8,000 sq ft medical building. $2.1M SBA 7(a) loan for veterinary hospital acquisition in Oakland County. $1.2M SBA loan for multi-location physical therapy practice expansion.

Common Use Cases: Physician practice acquisitions and buy-ins, dental practice purchases or partner buyouts, urgent care clinic real estate purchases, veterinary hospital acquisitions, medical office building purchases (owner-occupied), and equipment financing (imaging equipment, surgical equipment).

Construction & Commercial Contracting

Industries We Serve: General contractors (commercial and residential), excavation and site work contractors, concrete contractors and flatwork specialists, HVAC installation and service companies, plumbing contractors, electrical contractors, roofing companies, restoration, remediation, and environmental cleanup, and landscaping and hardscaping companies.

Why SBA Loans Work for Michigan Contractors:

Construction and contracting businesses operate with lumpy cash flow—large projects create seasonal revenue spikes, but banks want to see consistent monthly deposits. Traditional lenders view this as "risky." SBA lenders who understand contracting know how to analyze project-based cash flow, bonding capacity, and backlog.

Recent Success Stories: $1.6M SBA 7(a) loan for Metro Detroit excavation company acquiring competitor with $8M annual backlog. $2.4M SBA 504 loan for Grand Rapids HVAC company purchasing 30,000 sq ft facility + fleet expansion. $890K SBA 7(a) loan for concrete contractor buying out retiring partner. $3.1M USDA B&I loan for restoration company expanding to three Michigan markets.

Common Use Cases: Acquiring established contracting businesses, purchasing commercial buildings and shop facilities, equipment financing (excavators, dump trucks, specialized equipment), working capital for large project deposits and material costs, fleet expansion and replacement, and partner buyouts.

Automotive Services & Dealerships

Industries We Serve: Auto dealerships (new and used), automotive repair and service centers, collision repair and body shops, car washes (automatic, self-serve, and express), tire and wheel shops, fleet maintenance operations, and quick lube and oil change franchises.

Why SBA Loans Work for Michigan Automotive Businesses:

Michigan's automotive sector extends far beyond the Big Three. The state has 2,200+ auto dealerships and thousands of automotive service businesses. Real estate requirements are substantial—most dealerships and large service centers need $1M to $5M+ for facilities. SBA 504 loans offer fixed-rate, long-term financing that conventional lenders can't match for automotive real estate.

Recent Success Stories: $4.2M SBA 504 loan for used car dealership purchasing 3-acre lot with 15,000 sq ft showroom. $1.1M SBA 7(a) loan for car wash acquisition (express tunnel wash, $850K revenue). $2.8M SBA 7(a) loan for collision center acquisition with two Metro Detroit locations. $750K SBA loan for automotive service center expansion.

Common Use Cases: Auto dealership acquisitions, car wash purchases (high ROI, strong cash flow), collision center real estate and equipment, service center facility purchases, and multi-bay shop expansions.

Fuel & Convenience Retail

Industries We Serve: Gas stations with convenience stores, standalone convenience stores, liquor stores, party stores, and truck stops.

Why SBA Loans Work for Michigan Fuel & Convenience Operators:

Michigan's 5,000+ gas stations and convenience stores face unique financing challenges: environmental concerns (UST compliance), franchise restrictions (branded vs. unbranded), high real estate costs, and equipment requirements (fuel pumps, canopies, coolers). Traditional banks often decline these deals due to environmental liability concerns. SBA lenders with gas station experience know how to structure deals with proper Phase I/II environmental assessments and UST insurance.

Recent Success Stories: $2.9M SBA 7(a) loan for 2-location gas station/c-store acquisition in Oakland County. $1.6M SBA 7(a) loan for liquor store acquisition (high-traffic location, $2.4M revenue). $850K SBA 504 loan for party store real estate purchase. $3.4M SBA loan for multi-unit convenience store operator expansion.

Common Use Cases: Gas station acquisitions (branded and unbranded), liquor store purchases, multi-unit convenience store expansion, real estate purchases for existing operations, and equipment upgrades and modernization.

Professional Services

Industries We Serve: Law firms, accounting and tax practices, engineering firms, architecture firms, management consulting, managed IT service providers (MSPs), marketing and advertising agencies, insurance agencies, financial advisory practices, and property management companies.

Why SBA Loans Work for Michigan Professional Services:

Professional service firms generate strong cash flow with minimal inventory and equipment requirements. However, traditional banks struggle to finance these acquisitions because value is primarily goodwill and client relationships, there are no hard assets for collateral, client concentration concerns exist, and non-compete and transition dependencies matter. SBA lenders specializing in professional services understand how to analyze recurring revenue, client retention, and partner transition plans.

Recent Success Stories: $1.9M SBA 7(a) loan for Detroit law firm acquiring 3-attorney practice. $1.4M SBA 7(a) loan for managed IT service provider acquisition (300+ business clients). $2.2M SBA 7(a) loan for accounting practice acquisition (CPA firm merger). $950K SBA loan for insurance agency expansion.

Common Use Cases: Partner buyouts and succession planning, acquiring books of business or entire practices, real estate purchases for professional office space, multi-location expansion, and technology infrastructure investments.

Hospitality, Fitness & Personal Services

Industries We Serve: Franchise restaurants (QSR and full-service), independent restaurants and breweries, fitness centers and gyms, pet care facilities (boarding, daycare, grooming), RV parks and campgrounds, self-storage facilities, and funeral homes and crematories.

Why SBA Loans Work for These Michigan Service Industries:

Service-based businesses with real estate components are ideal SBA borrowers because they have predictable recurring revenue (memberships, contracts), real property as collateral, established customer bases, and franchise systems with proven models.

Recent Success Stories: $2.7M SBA 7(a) loan for multi-unit franchise restaurant expansion (3 locations). $1.8M SBA 504 loan for fitness center purchasing 12,000 sq ft facility. $2.4M SBA loan for pet boarding facility real estate and construction. $3.8M SBA 504 loan for self-storage development (climate-controlled, 60,000 sq ft). $1.6M SBA loan for funeral home acquisition.

Common Use Cases: Franchise purchases and multi-unit expansion, restaurant real estate acquisitions, fitness center equipment and facility financing, self-storage development and acquisition, and RV park and campground purchases.

Agriculture & Rural Businesses

Industries We Serve: Production farms (row crops, livestock, dairy), agricultural processing and packing, farm equipment dealerships, grain elevators and storage facilities, agribusiness services, rural manufacturing, and broadband and telecommunications (rural deployment).

Why USDA B&I Loans Work for Rural Michigan:

Most Michigan business owners don't realize that 97% of Michigan qualifies as "rural" under USDA guidelines. If you're outside the cores of Detroit, Grand Rapids, Lansing, or Ann Arbor, you likely qualify for USDA Business & Industry loans offering higher loan amounts ($2M to $25M vs. $5M SBA maximum), longer terms (up to 30 years for real estate), job creation incentives (favorable terms for businesses creating Michigan jobs), and eligibility across 97% of Michigan (most of the state qualifies).

Recent Success Stories: $8.5M USDA B&I loan for agricultural processing facility expansion (120 jobs created). $4.2M USDA loan for rural broadband deployment. $3.6M USDA loan for farm equipment dealership acquisition. $2.8M USDA loan for grain elevator expansion.

Common Use Cases: Agricultural processing expansions, farm equipment and machinery, rural manufacturing facilities, food processing and cold storage, broadband infrastructure, and large-scale land and facility purchases.

Understanding SBA Loan Programs: Which One Fits Your Michigan Business?

Michigan businesses have three primary government-backed financing options. Understanding which program aligns with your needs determines your approval odds and ultimate loan terms.

SBA 7(a) Loans: Maximum Flexibility for Michigan Businesses

Best For: Business acquisitions (buying an existing company or franchise), mixed-use financing (real estate + equipment + working capital in one loan), working capital and inventory, partner buyouts, debt refinancing to improve cash flow, and smaller real estate purchases (under $2M).

Loan Details: Amount up to $5,000,000. Terms up to 25 years (real estate) or 10 years (equipment/working capital). Down payment typically 10-15%. Rates currently 10-12% (Prime + 2.5% to 4.5%). Structure is single lender with faster closing (45-60 days typical).

Why Michigan Businesses Choose 7(a): Most versatile—use for virtually any legitimate business purpose. Faster closing than 504 (one lender instead of two). Can include working capital (504 cannot). Ideal for business acquisitions where you need flexibility.

Michigan Industries Using 7(a) Most: Medical/dental practices (acquisitions), professional services (law firms, accounting practices, MSPs), manufacturing companies (business purchases), automotive services (dealerships, repair shops), contractors (equipment + working capital), and retail/convenience (gas stations, liquor stores).

Example 7(a) Deal: Sterling Heights Manufacturing Company secured a $2,200,000 loan to acquire a competitor (tool & die shop with $3.5M revenue). Structure included $1,800,000 for business purchase plus $400,000 working capital. Terms were 10 years at 10.5% rate with 15% down payment. Timeline was 52 days to funding.

SBA 504 Loans: Fixed-Rate Real Estate & Equipment Financing

Best For: Commercial real estate purchases (owner-occupied), building construction or major renovation, large equipment purchases ($500K+), manufacturing facility expansions, and long-term fixed rate (eliminate rate risk).

Loan Details: Amount up to $5,000,000 (up to $5,500,000 for manufacturing/energy projects). Terms up to 25 years (real estate) or 10-20 years (equipment). Down payment as low as 10% (vs. 20-30% conventional). Rates fixed for life of loan, currently 5-7% (SBA portion). Structure is two loans—50% conventional, 40% SBA CDC, 10% down payment.

Why Michigan Businesses Choose 504: Lowest down payment at 10% vs. 15-20% for 7(a) or 25-30% conventional. Fixed rate locked in for 10-25 years (no rate risk). Best for large real estate because structure saves money on deals over $1M. Preserves working capital because lower down payment frees up cash for operations.

Michigan Industries Using 504 Most: Manufacturing (facility purchases, equipment), healthcare (medical office buildings, urgent care facilities), contractors (shop/warehouse facilities), automotive (dealerships, service centers), self-storage and RV parks, and any business purchasing $1M+ owner-occupied real estate.

Example 504 Deal: Grand Rapids Dental Practice secured $1,800,000 to purchase an 8,000 sq ft medical office building. Structure was $900K bank loan plus $720K SBA CDC loan plus $180K down (10%). Terms were 25 years at 6.2% fixed (SBA portion) and 8.5% (bank portion). Monthly payment of $11,400 compared to $14,800 for conventional at 7.5% with 25% down. Timeline was 68 days to funding.

504 vs. 7(a) Decision Guide: When choosing between programs, consider primary use (business acquisition and working capital favor 7(a) while real estate and large equipment favor 504), loan size (under $2M favors 7(a) while over $1M favors 504), rate preference (variable rate that may drop favors 7(a) while fixed rate with no risk favors 504), speed priority (faster closing of 45-60 days favors 7(a) while can wait 60-90 days favors 504), down payment (10-15% acceptable favors 7(a) while want lowest possible at 10% favors 504), and working capital (need it included favors 7(a) while don't need it favors 504).

USDA Business & Industry Loans: Larger Loans for Rural Michigan

Best For: Larger loan amounts ($2M to $25M), rural Michigan locations (97% of the state qualifies), businesses creating jobs, manufacturing and processing operations, and agricultural-related businesses.

Loan Details: Amount from $2,000,000 to $25,000,000. Terms up to 30 years (real estate) or 15 years (equipment). Guarantee up to 80% (allows lenders to take more risk). Rates negotiable, typically 8-11%. Eligibility is rural areas with populations under 50,000.

Why Michigan Businesses Choose USDA: Much larger loans because SBA caps at $5M while USDA goes to $25M. Most of Michigan qualifies outside Detroit/Grand Rapids/Ann Arbor cores. Job creation incentives provide favorable terms for businesses hiring. Flexible uses include real estate, equipment, working capital, and refinancing.

Michigan Cities That Qualify for USDA: Most of Michigan outside the immediate cores of Detroit Metro (but many suburbs qualify), Grand Rapids, Ann Arbor, Lansing, and Flint. Counties with extensive USDA eligibility include virtually all rural counties including Monroe, Livingston, Lenawee, Jackson, Calhoun, Kalamazoo (partial), Muskegon, Ottawa (partial), Kent (partial), Macomb (partial), Oakland (partial), and all of Northern Michigan and the Upper Peninsula.

Michigan Industries Using USDA Most: Food processing and agricultural manufacturing, rural manufacturing operations, large-scale contractors and excavation, broadband and telecommunications, farm equipment dealerships, agribusiness services, and large industrial operations.

Example USDA Deal: Monroe County Manufacturing Company secured $6,800,000 to acquire a 120,000 sq ft industrial facility plus equipment for automotive parts production. The project created 45 full-time positions. Structure was 80% USDA guarantee with 20% lender risk. Terms were 25 years at 9.2% rate. Timeline was 78 days to funding.

Do You Qualify? SBA Loan Requirements for Michigan Businesses

Most established Michigan businesses in capital-intensive industries qualify for SBA financing. Here's what lenders look for:

Basic Qualification Criteria

Time in Business: Minimum of 2+ years under current ownership. Preferred is 3+ years (stronger approval odds). Exceptions exist for startups and franchises with strong parent company support.

Annual Revenue: For 7(a) Loans, $250,000+ (varies by loan size and purpose). For 504 Loans, $500,000+ (for real estate purchases). For USDA B&I, $1,000,000+ (for larger rural projects).

Personal Credit Score: Minimum of 650 (some flexibility with strong compensating factors). Preferred is 680+. Ideal is 700+. If your score is 620-650, we can still work with you if you have strong business cash flow, significant time in business (5+ years), large down payment (20%+), valuable collateral, and industry expertise.

Cash Flow & Profitability: Business generates sufficient cash flow to service debt. Debt Service Coverage Ratio (DSCR) of 1.25x or higher preferred. Positive net income (or path to profitability for acquisitions).

Down Payment: SBA 7(a) requires 10-15% of project costs. SBA 504 requires 10% of project costs. USDA requires 10-20% depending on project.

Collateral: Lenders take security interest in assets purchased with loan proceeds. Additional collateral may be required (business assets, real estate). Personal guarantees required from owners with 20%+ equity.

Industry-Specific Considerations

Manufacturing & Industrial: Equipment appraisals for specialized machinery, environmental assessments (Phase I/II if applicable), customer concentration analysis, and order backlog and contract documentation.

Medical & Dental: Practice valuation (typically 4-6x EBITDA for dental, 3-5x for medical), payor mix analysis (insurance vs. cash pay), provider credentialing and contracts, and patient records and retention analysis.

Construction & Contracting: Bonding capacity, project backlog documentation, license verification, safety record (OSHA, workers comp), and equipment list and condition.

Automotive & Fuel: Environmental assessments (Phase I required, Phase II if concerns), UST compliance and insurance (for gas stations), franchise agreements (if applicable), and EPA and state environmental compliance.

Professional Services: Client concentration (no single client over 15-20% ideal), recurring revenue analysis, partner/key person transition plans, and non-compete agreements.

Common Reasons Businesses Come to Us After Bank Declines

You've been turned down by Chase, Huntington, or your local bank. That doesn't mean you don't qualify—it means you need a different lender. We successfully fund businesses declined for credit score in the 650-680 range (not "perfect" but completely financeable, and we match you with lenders who understand compensating factors), business less than 5 years old (2-4 years in business with strong cash flow, franchise operators with parent company support, and businesses with experienced ownership), industry the bank doesn't understand (tool & die shops, injection molding, specialty manufacturing, managed IT services and technology businesses, restoration and environmental services, and veterinary practices and animal hospitals), complex deal structure (multi-property acquisitions, partnership buyouts with seller financing, business + real estate + working capital in one transaction, and companies with multiple entities), and "unusual" collateral (specialized manufacturing equipment, franchise intangibles, professional practice goodwill, and fleet equipment and vehicles).

The key: Different lenders have different credit boxes, industry focuses, and risk appetites. Your job isn't to change your business—it's to find the lender whose criteria your business fits. That's our specialty.

Why Choose LVRG Business Funding for Your Michigan SBA Loan

We're Not Another Bank. We're Your Access to 25+ Specialized Lenders.

Most Michigan business owners approach SBA financing the wrong way: They contact banks one at a time, fill out endless applications, submit documents repeatedly, and get declined without understanding why. Here's the problem: Each bank specializes in different industries, loan types, and credit profiles. Chase might decline your tool & die shop acquisition, but a specialized manufacturing lender would approve it immediately. Huntington might say no to your dental practice purchase, but a healthcare-focused SBA lender sees it as a perfect deal. You don't need one bank. You need the RIGHT bank for YOUR specific situation.

What Makes Us Different

20+ Years Facilitating Michigan Business Financing: We have facilitated $1+ billion in business financing for 10,000+ businesses served nationwide with deep expertise in Michigan's key industries. We are based in Metro Detroit and serve all of Michigan.

Access to 25+ Specialized SBA Lenders: We maintain direct relationships with national SBA lenders with the best rate pricing, regional banks with local market expertise, community development financial institutions (CDFIs), specialty lenders focused on specific industries (manufacturing, healthcare, contractors, etc.), and USDA-approved lenders for rural Michigan. You get lenders you cannot access on your own. Many of our partner lenders don't accept direct applications—they only work through experienced brokers who pre-underwrite and package deals correctly.

Complete Pre-Underwriting & File Packaging: This is where most business owners waste months. They submit incomplete applications, miss critical documentation, or present their business in ways that trigger declines. We handle everything including comprehensive financial analysis and cash flow projections, complete loan package assembly and presentation, pre-underwriting before submission (identify and address issues early), and professional presentation that positions your business optimally. Result: No wasted time with lenders who'll decline you. Faster approvals. Better terms.

White-Glove Advocacy from Application to Funding: Once we submit your loan, we're your dedicated advocate with the lender, we handle every document request, every question, every revision, we manage the entire SBA approval and closing process, and we keep you updated at every stage. You focus on running your business. We handle the financing.

Exclusive Pricing You Can't Get Direct: Because of our volume and long-standing relationships, we've secured special rate pricing that business owners cannot access going direct to banks. You get lower rates than going bank-to-bank, more favorable terms and structures, faster funding timelines, and access to specialized programs most banks don't offer.

All at Zero Cost to You: Here's what surprises most Michigan business owners: You pay us nothing. Zero. Not a dollar. We're compensated directly by SBA lenders through standard broker fees built into every SBA loan—whether you use a broker or not. Banks pay us for bringing them qualified deals. You get better pricing than going direct, expert packaging and guidance, access to 25+ specialized lenders, and white-glove service from application through funding, all at absolutely no cost to your business.

Think of it this way: If you go directly to a bank, they still pay internal broker fees to their loan officers. But you get one bank, one option, whatever rate they quote you. When you work with us, you get 25+ banks competing for your deal, better pricing, and it costs you nothing. There's literally no downside to using us.

Michigan Banks and Credit Unions Refer Their Clients to Us

When local Michigan banks and credit unions can't fund an SBA loan themselves—whether it's outside their credit box, too complex, or simply not their specialty—they send their clients to us. Banks don't refer customers to competitors. They refer to specialists they trust. We've built relationships with community banks throughout Michigan, credit unions serving Michigan businesses, commercial loan officers who trust us with their clients, and CPAs and business attorneys who recommend us. That's the ultimate endorsement.

Our 5-Step Process: How We Get Michigan Businesses Funded

Step 1: Quick Consultation (30 Minutes)

We discuss your financing needs and timeline, your business situation (industry, revenue, time in business), intended use of proceeds, and preliminary qualification assessment. No pressure. No generic sales pitch. Just straightforward discussion about whether SBA financing makes sense for you. Call (855) 998-5874 or email info@lvrgllc.com.

Step 2: Document Gathering & Analysis (3-5 Days)

We collect 3 years business tax returns (1120, 1120S, or 1065), 3 years personal tax returns (1040), year-to-date profit & loss and balance sheet, business debt schedule, and purchase agreement (if acquisition) or project costs (if real estate/equipment). We analyze your financials, identify any potential issues, and determine the best loan structure and lender match for your situation.

Step 3: Expert Packaging & Pre-Underwriting (5-7 Days)

This is where we add massive value: complete loan package assembly, cash flow analysis and debt service calculations, professional business presentation, executive summary highlighting strengths, and pre-underwriting to identify concerns before submission. We present your business in the strongest possible light and eliminate issues that cause delays or declines.

Step 4: Lender Submission & Management (2-4 Weeks)

We submit to the best-fit lenders from our network, manage all lender communication and document requests, negotiate terms and conditions on your behalf, and keep the process moving toward approval. Because we've pre-underwritten correctly, lenders move faster. You avoid the endless back-and-forth that delays most deals.

Step 5: SBA Approval, Closing & Funding (2-4 Weeks)

Lender approves and submits to SBA for guarantee. SBA reviews and issues approval (typically 5-10 days). We coordinate all closing requirements. You sign final documents and receive funds.

Total Timeline: SBA 7(a) Loans average 45-60 days. SBA 504 Loans average 60-90 days. USDA B&I Loans average 60-90 days. Some deals close faster. Complex transactions (multiple properties, business acquisitions with extensive due diligence, or situations requiring additional documentation) may extend timelines. But our process eliminates the most common delays.

Real Michigan Businesses, Real Results

"After three months of runaround from Chase and Huntington, LVRG packaged our acquisition in two weeks and got us better terms than we expected." Manufacturing Company, Sterling Heights, MI. Industry: Tool & Die Shop Acquisition. Loan Amount: $850,000 SBA 7(a). Challenge: Major banks declined due to "specialized industry" concerns. Result: Approved with specialized manufacturing lender, 10.2% rate, funded in 49 days.

"They understood our industry in ways traditional banks never could. Made the whole process simple." Medical Practice, Grand Rapids, MI. Industry: Multi-Provider Physician Practice. Loan Amount: $1,200,000 SBA 504. Challenge: Purchasing medical office building, needed low down payment. Result: 10% down (vs. 25% conventional), 6.4% fixed rate, funded in 61 days.

"We were ready to give up after two bank declines. LVRG found a lender who actually understood excavation businesses." Construction Company, Metro Detroit. Industry: Excavation & Site Work. Loan Amount: $2,300,000 USDA B&I. Challenge: Acquiring competitor with substantial equipment and contracts. Result: Rural Michigan location qualified for USDA, lower rates, 25-year term.

"Better pricing than going direct to our bank, zero cost to us—why would anyone not use LVRG?" Automotive Group, Ann Arbor, MI. Industry: Multi-Location Collision Centers. Loan Amount: $1,650,000 SBA 7(a). Challenge: Two-location acquisition with real estate and equipment. Result: 9.8% rate (vs. 11.2% direct bank quote), funded in 54 days.

Understanding Current SBA Loan Rates in Michigan (2026)

SBA loan rates improved significantly throughout 2025, and the trend continues into 2026, making now an opportune time for Michigan businesses to pursue financing.

Current Michigan SBA Market Snapshot

Q4 2025 Data (Most Recent): Average interest rate of 9.6% (down from 10.5% in Q4 2024). Average loan size of $526,749. Loans approved in Q2 2025 totaled 388 loans worth $204 million.

What Determines Your Rate

Prime Rate Baseline: Current prime rate is 7.5% (as of December 2025). SBA 7(a) rates equal Prime + 2.5% to 4.5%. Your markup depends on loan size, term, and credit strength.

Loan Size: Loans over $1M typically get better pricing. Larger loans equal lower lender markup within SBA guidelines.

Loan Term: 10-year terms may have different pricing than 25-year terms. Longer terms sometimes carry slightly higher rates.

Credit Strength: 720+ credit scores get best pricing. 680-720 scores get mid-tier pricing. 650-680 scores get higher pricing (but still financeable).

Lender Competition (This Is Where We Add Value): Going direct to one bank means whatever rate they quote. Using us means 25+ lenders competing for your deal which means better rates.

Current Rate Ranges by Program

SBA 7(a) Loans: Best pricing is 10.0% - 10.5% (Prime + 2.5% to 3.0%). Standard pricing is 10.5% - 11.5% (Prime + 3.0% to 4.0%). Higher-risk scenarios are 11.5% - 12.0% (Prime + 4.0% to 4.5%).

SBA 504 Loans: SBA portion (40%) is 5.0% - 7.0% fixed (tied to 10-year Treasury). Bank portion (50%) is 7.5% - 9.5% (typically variable). Blended effective rate is 6.5% - 8.5%.

USDA B&I Loans: Negotiated rates are 8.0% - 11.0%. Depends on loan size, term, business strength, and rural location.

Why We Get You Better Rates

Single Bank: You get whatever rate their credit committee approves based on their internal policies, regardless of market competition.

LVRG Multi-Lender Platform: We submit to multiple specialized lenders simultaneously. Lenders know they're competing for your deal. Competition drives pricing down.

Real example: Direct bank quote was 11.2%, 15% down, 10-year term. LVRG lender network delivered 10.1%, 10% down, 10-year term. Savings of 1.1% rate reduction equals $165/month on $1M loan which equals $19,800 over 10 years. And you pay us nothing for this pricing advantage.

Frequently Asked Questions: SBA Loans for Michigan Businesses

How much does LVRG charge for SBA loan services?

Answer: Absolutely nothing. We're compensated directly by SBA lenders through standard broker fees that are built into every SBA loan—whether you use a broker or not. You get white-glove service, expert packaging, access to 25+ specialized lenders, and exclusive pricing completely free.

How long does the SBA loan process take?

Typical timelines are SBA 7(a) Loans at 45-60 days from complete application to funding, SBA 504 Loans at 60-90 days, and USDA B&I Loans at 60-90 days. We speed up the process by pre-packaging your file correctly and eliminating back-and-forth delays that slow most deals. Complex transactions (multiple properties, extensive due diligence, or unusual structures) may take longer.

What if big banks already turned down my SBA loan?

This is exactly our specialty. A decline from Chase, Wells Fargo, Huntington, or PNC does NOT mean you don't qualify. The mega-banks are extremely selective and turn down 8 out of 10 applications. We have access to 25+ SBA lenders with different criteria, different industry focuses, and different risk appetites. We've successfully funded hundreds of Michigan businesses declined by major banks.

Common decline reasons we overturn: Credit score "not perfect enough" (banks want 750+, we have lenders at 650+), industry bank doesn't understand (manufacturing, healthcare, specialized services), deal complexity (acquisitions, multi-location, partnership structures), time in business (banks want 5+ years, we can do 2+ years), and loan size outside bank's sweet spot.

What credit score do I need for an SBA loan in Michigan?

Minimum is 650 with strong compensating factors. Preferred is 680+. Ideal is 720+. If your score is 620-650, we can still potentially work with you if you have solid cash flow and profitability (DSCR 1.5x+), significant time in business (5+ years), strong collateral position, large down payment (20%+), and industry expertise and management experience. Different lenders have different credit overlays. Our job is matching you with the lender most likely to approve your specific profile.

How much can I borrow with an SBA loan in Michigan?

SBA 7(a) Loans go up to $5,000,000. SBA 504 Loans go up to $5,000,000 (up to $5,500,000 for manufacturing and energy-efficient projects). USDA B&I Loans go up to $25,000,000 for qualifying rural Michigan businesses. We typically work with Michigan businesses seeking $250,000 to $5,000,000+ in financing. We've facilitated loans as small as $150K and as large as $18M (USDA).

Do I need collateral for an SBA loan?

Yes, SBA loans are secured loans. However, collateral requirements are more flexible than conventional financing. How it works: Lenders take a security interest in assets purchased with loan proceeds (real estate, equipment, inventory). If business collateral is insufficient to fully secure the loan, they may require additional collateral (personal real estate, other business assets). Personal guarantees required from all owners with 20%+ equity. SBA policy states: "Lack of collateral will not be the sole reason for declining an SBA loan if the borrower can demonstrate repayment ability." Translation: If your cash flow supports the debt, lenders can approve even with limited collateral.

Can I use an SBA loan to buy a business in Michigan?

Absolutely. SBA 7(a) loans are ideal for business acquisitions: Finance up to 90% of purchase price. Terms up to 10 years (25 years if real estate included). Competitive interest rates. Can include working capital for post-acquisition operations. Business acquisition financing is one of our specialties. We've helped Michigan business owners acquire manufacturing companies (tool & die shops, metal fabricators, automotive suppliers), medical and dental practices, professional services firms (law firms, accounting practices, MSPs), automotive businesses (dealerships, service centers, car washes), restaurants and franchise operations, and construction and contracting companies.

Key factors for acquisition financing: Business must have 2+ years operating history. Seller can hold 5-10% seller note (helps with down payment). Transition period typically required (30-90 days). Non-compete agreements essential.

Can I use an SBA loan for commercial real estate in Michigan?

Yes. Both SBA 7(a) and SBA 504 loans finance owner-occupied commercial real estate. Requirements: Owner-occupied means at least 51% of building used by your business. Down payment of 10-15% (vs. 20-30% conventional). Terms up to 25 years. Rates are fixed (504) or variable (7(a)).

What qualifies: Manufacturing facilities and industrial buildings, medical/dental office buildings, retail and restaurant locations, office buildings for professional services, shop/warehouse facilities for contractors, automotive dealerships and service centers, and mixed-use properties (if you occupy 51%+).

What doesn't qualify: Investment properties (rental buildings), properties primarily for lease to others, and properties for passive income.

Choose 7(a) or 504: 504 is better for larger real estate purchases ($1M+), want fixed rate and lowest down payment. 7(a) is better if you need working capital too, faster closing, or smaller deals.

What's the difference between going direct to a bank vs. using LVRG?

Going Direct to a Bank: One lender equals one set of criteria equals one answer. You get whatever rate they quote (no competition). If declined, you start over with next bank. You handle all packaging and documentation. No expertise in optimizing your application. 60-90 day process minimum. 80% decline rate at major banks.

Using LVRG Business Funding: 25+ lenders equal multiple options equal higher approval odds. Lenders compete for your deal which equals better pricing. Pre-underwriting identifies best-fit lenders. We handle all packaging and documentation. Expert optimization of your application. 45-60 day typical process. Zero cost to you.

Does my Michigan business location matter for USDA loans?

Yes—and this is a HUGE opportunity most businesses miss. 97% of Michigan qualifies as "rural" under USDA guidelines. If your business is located outside the immediate cores of Detroit, Grand Rapids, Ann Arbor, or Lansing, you likely qualify for USDA Business & Industry loans.

USDA-eligible areas include entire Upper Peninsula, all of Northern Michigan, most suburban areas of major metros, and virtually all counties outside metro cores.

Why this matters: USDA loans go up to $25M (vs. $5M SBA cap). Competitive rates (often better than SBA). Longer terms (up to 30 years for real estate). Job creation incentives.

Check eligibility: We can verify your specific address in 5 minutes. Most Michigan businesses are shocked to learn they qualify.

How do I know if I should use a 7(a) or 504 loan?

Choose SBA 7(a) if: Buying an existing business or franchise, need working capital along with real estate/equipment, want faster closing (single lender, 45-60 days), real estate purchase under $2M, prefer variable rate (might drop if Fed cuts rates), or want maximum flexibility in fund usage.

Choose SBA 504 if: Purchasing commercial real estate or major equipment, want fixed rate for 10-25 years (eliminate interest rate risk), want lowest down payment (10% vs. 15% for 7(a)), real estate purchase over $1M (504 structure saves money), don't need working capital (504 can't include it), or have manufacturing or energy-efficient project.

Not sure? That's exactly what we help you figure out. Different situations call for different programs. Call us and we'll walk through the best option for your specific business.

What industries do you specialize in?

We have deep expertise in Michigan's highest-value business sectors: Manufacturing (tool & die, metal fabrication, injection molding, CNC machining, automotive parts, industrial equipment, food processing). Medical/Healthcare (physician practices, dental practices, urgent care, veterinary hospitals, home healthcare, surgical centers). Construction (general contractors, excavation, concrete, HVAC, plumbing, electrical, restoration/remediation). Automotive (dealerships, collision centers, car washes, tire shops, service centers). Professional Services (law firms, accounting practices, engineering firms, MSPs, insurance agencies, consulting firms). Retail/Convenience (gas stations, liquor stores, convenience stores, party stores). Hospitality/Services (restaurants, fitness centers, pet care, self-storage, RV parks, funeral homes). Agriculture/Rural (food processing, farm operations, agribusiness, rural manufacturing, broadband). If you operate an established Michigan business with real revenue and growth plans, we can help.

Ready to Get Your Michigan Business Funded?

Stop wasting time with banks that will say no or can't say yes. You've built a real business. You generate real revenue. You have a legitimate growth opportunity. Let's talk about how we can help you secure the financing you need—with better terms, faster timelines, and zero cost to you.

Three Ways to Get Started

Call Our Michigan SBA Specialists: (855) 998-5874. Speak directly with an SBA loan expert who understands Michigan businesses and your industry. Available Monday-Friday, 9am-6pm EST.

Email Your Deal Summary: info@lvrgllc.com. Tell us about your business, what you need, and your timeline. We'll respond within 24 hours with a preliminary assessment and next steps.

Schedule a Consultation: Pick a time that works for your schedule. We'll discuss your needs, review your qualification factors, and map out your path to approval.

About LVRG Business Funding

LVRG Business Funding is Michigan's leading SBA loan platform, connecting Michigan businesses with the nation's most capable and specialized SBA lenders. Based in Metro Detroit, we serve businesses throughout Michigan—from urban markets like Detroit, Grand Rapids, and Ann Arbor to rural communities across the state.

Over 20 years, we've facilitated $1+ billion in business financing for more than 10,000 companies nationwide, with deep expertise in Michigan's key industries and economic landscape.

We understand Michigan's manufacturing ecosystem, healthcare and medical practice valuations, construction and contracting cash flow dynamics, automotive industry financing requirements, professional services acquisition structures, and rural Michigan USDA opportunities.

Our mission: Make SBA financing accessible, understandable, and successful for every qualified Michigan business—from Detroit to the Upper Peninsula, from Grand Rapids to rural Michigan communities.

Powered by decades of SBA lending expertise and direct relationships with 25+ specialized lenders nationwide, we provide Michigan businesses with financing solutions they cannot access on their own.

LVRG Business Funding Michigan's #1 SBA Loan Platform (855) 998-5874 info@lvrgllc.com Based in Metro Detroit | Serving All of Michigan Loan Programs: SBA 7(a) Loans | SBA 504 Loans | USDA Rural Business Loans

The Complete Guide to SBA 504 Loans in Michigan: Commercial Real Estate & Equipment Financing with 10% Down | Fixed Rates for 25 Years | 2026

Last Updated: January 2026 | Reading Time: 16 minutes

Stop paying rent. Start building equity. SBA 504 loans provide Michigan businesses with the lowest down payments, longest fixed-rate terms, and most stable monthly payments available for purchasing commercial real estate and major equipment.

If you're a Michigan business owner looking to buy your building, purchase a manufacturing facility, acquire a warehouse, or finance major equipment—and you want fixed rates for 25 years with just 10% down—this comprehensive guide covers everything you need to know about SBA 504 loans in 2026.

Table of Contents

1. What Are SBA 504 Loans in Michigan?

2. The Michigan SBA 504 Market in 2026

3. What Can You Use SBA 504 Loans For?

4. SBA 504 vs. SBA 7(a) vs. Conventional Loans

5. SBA 504 Requirements for Michigan Businesses

6. Rates, Terms & Structure

7. The SBA 504 Process

8. Michigan Industries Using SBA 504 Loans

9. Real Michigan Success Stories

10. Frequently Asked Questions

What Are SBA 504 Loans in Michigan?

SBA 504 loans provide Michigan businesses with long-term, fixed-rate financing specifically for purchasing commercial real estate and major equipment. Unlike conventional commercial loans or SBA 7(a) loans, the 504 program offers the lowest down payments, longest fixed-rate terms, and most stable monthly payments available for owner-occupied properties.

For Michigan businesses from Metro Detroit to Grand Rapids, Ann Arbor to Lansing, and throughout the state, SBA 504 loans have become the preferred financing for commercial real estate—whether you're a manufacturing company buying a production facility in Sterling Heights, a medical practice purchasing an office building in Grand Rapids, or a distribution company acquiring a warehouse in Livonia.

The Unique Three-Part SBA 504 Structure

SBA 504 loans are structured with three funding sources:

1. Bank Loan (50% of project cost)

• First lien position on the property

• Variable or fixed rate (lender's choice)

• 20-25 year term

• Current Michigan rates: 6-8%

2. SBA-Backed CDC Loan (40% of project cost)

• Second lien position on the property

• Fixed rate for the life of the loan (this is huge)

• 10, 20, or 25 year term (25 years most common)

• Current Michigan rates: 5.5-6.5%

3. Your Business Equity (10% minimum down payment)

• Cash injection from the business

• Can also include seller financing or existing equipment equity

Total project sizes: Typically $250,000 to $20 million+, with the SBA CDC portion capped at $5 million for standard projects and $5.5 million for Michigan manufacturing businesses and energy-efficient projects.

Example SBA 504 Structures

$2 Million Office Building Purchase:

• Bank loan: $1,000,000 (50%)

• SBA 504 CDC loan: $800,000 (40%)

• Your down payment: $200,000 (10%)

$10 Million Manufacturing Facility:

• Bank loan: $5,000,000 (50%)

• SBA 504 CDC loan: $4,000,000 (40%)

• Your down payment: $1,000,000 (10%)

Why Michigan Businesses Choose SBA 504 Loans

✓ 10% down payment (vs. 25-35% for conventional commercial mortgages)
✓ Fixed rates for life (10, 20, or 25 years—zero interest rate risk on 40% of the loan)
✓ No balloon payments (fully amortizing—you own the property free and clear at the end)
✓ Lower monthly payments (25-year terms significantly reduce payment vs. 15-year conventional)
✓ Preserves working capital (less cash required upfront means more cash for operations)
✓ Build equity instead of paying rent (stop making landlords wealthy)
✓ Large projects (finance up to $20M+ total project cost)
✓ Equipment included (can finance major equipment alongside real estate)

The Michigan SBA 504 Market in 2026

Michigan businesses are using SBA 504 loans at record levels for commercial real estate purchases and equipment financing, particularly in manufacturing, healthcare, distribution, and professional services sectors.

Current Michigan SBA 504 Market Conditions (2026)

Average project size: $2.8 million
Typical down payment: 10-15%
Fixed rates (SBA portion): Currently 5.5-6.5%
Most common use: Commercial real estate purchases (office buildings, manufacturing facilities, warehouses)
Top industries: Manufacturing (Michigan's #1 category), healthcare, retail, distribution, professional services

Michigan's Top SBA 504 Project Types

Manufacturing facilities (Michigan's largest 504 category by volume)

• Industrial buildings and production facilities

• Automotive supplier facilities

• Food processing plants

• Metal fabrication shops

Medical and dental office buildings

• Physician practice buildings

• Dental offices

• Veterinary clinics

• Urgent care facilities

Warehouses and distribution centers

• Industrial warehouses

• Logistics facilities

• Cold storage

• E-commerce fulfillment centers

Retail buildings and storefronts

• Shopping centers

• Standalone retail locations

• Restaurant buildings

• Franchise locations

Office buildings for professional services

• Law firms

• Accounting practices

• Engineering firms

• Technology companies

Geographic Concentration in Michigan

Metro Detroit leads Michigan in SBA 504 loan volume, accounting for approximately 45% of state activity, followed by:

• Grand Rapids and West Michigan (25%)

• Ann Arbor and Southeast Michigan (15%)

• Lansing and Mid-Michigan (10%)

• Other Michigan markets (5%)

What Can You Use SBA 504 Loans For?

CRITICAL LIMITATION: SBA 504 loans can ONLY be used for commercial real estate and equipment—not business acquisitions or working capital.

If you need to buy a business or need working capital, you want an SBA 7(a) loan instead.

Commercial Real Estate (Primary Use)

SBA 504 loans excel at financing owner-occupied commercial real estate:

✓ Office buildings – Purchase buildings for your business operations
✓ Manufacturing facilities – Industrial buildings, production facilities, automotive supplier facilities
✓ Warehouses – Distribution centers, storage facilities, logistics operations
✓ Retail buildings – Storefronts, shopping centers, restaurant buildings
✓ Medical offices – Dental practices, physician offices, veterinary clinics, urgent care
✓ Mixed-use properties – Must occupy 51%+ for your business, can rent up to 49%
✓ New construction – Build your facility from the ground up
✓ Major renovations – Purchase and renovate existing buildings

Owner-occupancy requirement: You must occupy at least 51% of the property for your own business operations. You can rent up to 49% to other tenants.

Michigan examples:

• Detroit manufacturing company purchases 40,000 sq ft production facility

• Grand Rapids medical practice buys 8,000 sq ft office building

• Ann Arbor retailer acquires downtown storefront with apartments above (occupies 60%)

• Lansing distributor purchases 60,000 sq ft warehouse

• Troy professional services firm buys office building, rents extra space

Major Equipment & Machinery

SBA 504 loans can finance equipment with a useful life of 10+ years:

✓ Manufacturing equipment – CNC machines, production lines, industrial machinery, robotics
✓ Heavy construction equipment – Excavators, cranes, bulldozers, specialized trucks
✓ Medical equipment – MRI machines, CT scanners, surgical equipment, dental chairs
✓ Food processing equipment – Commercial kitchens, packaging machinery, bottling lines
✓ Material handling systems – Forklifts, conveyors, warehouse automation systems

Equipment must have a useful life of 10+ years to qualify.

What You CANNOT Use SBA 504 Loans For

❌ Business acquisitions (use SBA 7(a) instead)
❌ Working capital (use SBA 7(a) instead)
❌ Inventory
❌ Debt refinancing (unless combined with substantial expansion—15-20%+ new investment)
❌ Investment properties (passive real estate you don't occupy)
❌ Speculative real estate

Remember: If you're buying a business OR need working capital alongside real estate, SBA 7(a) is the right program. SBA 504 is exclusively for real estate and equipment where you DON'T need working capital.

SBA 504 vs. SBA 7(a) vs. Conventional Loans: Which Is Right for Your Michigan Business?

Choose SBA 504 When:

✓ You're purchasing commercial real estate or equipment ONLY (no working capital needed)
✓ You want a fixed rate for 10-25 years (eliminates interest rate risk)
✓ You DON'T need working capital
✓ Your project is $1 million+ (504 structure is more cost-effective for larger projects)
✓ You want the lowest possible monthly payment
✓ You'll occupy 51%+ of the property for your business

Choose SBA 7(a) When:

✓ You're acquiring a business or franchise (504 doesn't allow this)
✓ You need working capital along with real estate or equipment
✓ You want faster closing (7(a) closes 2-4 weeks quicker than 504)
✓ Your project is under $1 million (simpler structure for smaller deals)
✓ You want maximum flexibility in use of funds

Choose Conventional Financing When:

✓ You have 30%+ cash for down payment
✓ You have perfect credit (720+) and exceptional financials
✓ You want the fastest possible closing
✓ You're willing to accept balloon payment risk
✓ You have strong banking relationships

Real Michigan Example: $3 Million Building Purchase

SBA 504 Structure:

• Down payment: $300,000 (10%)

• Bank loan: $1,500,000 (50% at 7%)

• SBA CDC loan: $1,200,000 (40% at 6% fixed)

• Monthly payment: ~$19,000

• Fixed for 25 years

• No balloon payment

• Total down: $300K

Conventional Structure:

• Down payment: $900,000 (30%)

• Bank loan: $2,100,000 (70% at 8%)

• Monthly payment: ~$21,000

• Rate adjusts after 5-7 years

• Balloon payment after 7-10 years

• Total down: $900K

SBA 504 Advantage:

• Saves $600,000 in down payment

• Saves $2,000/month ($24,000 annually)

• Fixed rate provides stability

• No balloon payment risk

SBA 504 Requirements for Michigan Businesses

Basic Eligibility Criteria

✓ 2+ years in business (tax returns required to demonstrate track record)
✓ Profitable with positive cash flow (must demonstrate ability to service debt)
✓ Personal credit 650+ (680+ strongly preferred)
✓ Occupy 51%+ of property (for your own business operations)
✓ U.S.-based for-profit business (nonprofits don't qualify)
✓ Net worth under $15 million (SBA small business size standards)
✓ Net income under $5 million (after taxes, averaged over 2 years)

Financial Requirements

Strong cash flow is critical for SBA 504 approval:

Lenders typically require debt service coverage ratio (DSCR) of 1.20x or higher

What this means: Your business cash flow should be at least 120% of all debt payments (existing debt + new SBA 504 loan)

Example:

• Monthly cash flow available for debt: $35,000

• Existing debt payments: $8,000/month

• New SBA 504 payment would be: $19,000/month

• Total debt payments: $27,000/month

• DSCR: $35,000 ÷ $27,000 = 1.30x ✓ (Approved)

Down Payment Requirements

Standard projects: 10% down payment
Special purpose properties (gas stations, hotels, car washes): 15-20% down
New businesses (less than 2 years): 15% down
Startups: 20-25% down (very difficult to qualify)

Property Requirements: The 51% Owner-Occupancy Rule

Critical requirement: You must occupy at least 51% of the property for your own business operations.

What works:

• You occupy 100% for your business ✓

• You occupy 60% for your business, rent 40% to tenants ✓

• You occupy 51% for your business, rent 49% to tenants ✓

What doesn't work:

• You occupy 40% for your business, rent 60% to tenants ✗

• Investment property with no owner occupancy ✗

• You occupy it today but plan to move in 2 years ✗

For mixed-use properties: If you're buying a building with retail on the first floor and apartments above, you must occupy 51%+ of the square footage for your business.

Credit Requirements

Personal credit score:

• 680+ credit: Strong candidate, standard approval process

• 650-679 credit: Good candidate, may need stronger compensating factors

• 620-649 credit: Very difficult, requires exceptional business strength

• Below 620: Typically not approved for SBA 504

Business credit: Strong business credit history helps your application (on-time payments to suppliers, vendors, existing creditors)

Credit issues that CAN be overcome:

• Past late payments (if resolved and you provide written explanation)

• Prior bankruptcies (if discharged 2+ years ago)

• Collections or judgments (if paid in full or in active repayment)

• High credit utilization (if cash flow clearly supports new debt)

Credit issues that are DIFFICULT to overcome:

• Recent bankruptcies (within 1-2 years)

• Current judgments or tax liens

• IRS tax liens (must be resolved)

• Recent foreclosures

• Multiple recent late payments

Time in Business

2+ years strongly preferred with tax returns demonstrating consistent profitability

Less than 2 years: Possible but significantly harder—requires:

• 15-20% down payment

• 700+ credit score

• Significant industry experience (5+ years)

• Comprehensive business plan

• Strong financial projections

Startups: Extremely difficult for SBA 504. If you're a startup, SBA 7(a) or conventional financing may be better options.

SBA 504 Loan Terms, Rates & Structure for Michigan

The Three-Part Loan Structure Explained

Every SBA 504 loan has three distinct components:

PART 1: Bank Loan (50% of Project Cost)

Structure:

• First lien position on the property

• Provides 50% of total project financing

• Variable or fixed rate (bank's choice, most use variable)

• 20-25 year amortization (most common: 25 years)

Current Michigan rates (2026): 6-8% depending on bank and borrower strength

Example on $3M project:

• Bank provides: $1,500,000

• Rate: 7% variable

• Term: 25 years

• Monthly payment: ~$10,600

PART 2: SBA CDC Loan (Up to 40% of Project Cost)

Structure:

• Second lien position on the property

• Provides up to 40% of total project financing

• Fixed rate for the LIFE of the loan (this is the huge advantage)

• 10, 20, or 25 year term (25 years most common for real estate)

• No prepayment penalty after typical 1-2 year window

Current Michigan rates (2026): 5.5-6.5% fixed for life

Example on $3M project:

• CDC provides: $1,200,000

• Rate: 6.0% fixed for 25 years

• Term: 25 years

• Monthly payment: ~$7,700

PART 3: Your Business Equity (10%+ Down Payment)

Structure:

• Cash injection from business

• Can include seller financing in some cases

• Can include equity in existing equipment (for equipment-heavy projects)

Example on $3M project:

• Your contribution: $300,000

• Source: Cash from business operations or owner equity

Combined Effective Interest Rates

On a typical $3 million SBA 504 project:

• Bank portion (50% at 7%): Weighted cost 3.5%

• SBA portion (40% at 6%): Weighted cost 2.4%

• Combined effective rate: ~5.9%

Compare to alternatives:

• Conventional commercial mortgage: 8-12%

• SBA 7(a) loan: 9-11%

• SBA 504 advantage: 2-5% lower effective rate

Repayment Terms

Commercial real estate: 20 or 25 years (25 years most common)
Equipment: 10 or 20 years (based on useful life of equipment)

All SBA 504 loans are fully amortizing—no balloon payments.

You know your exact monthly payment for the life of the loan. When the term ends, you own the property free and clear.

Example monthly payment on $3 million project, 25 years:

• Bank payment (50% portion): ~$10,600/month

• SBA CDC payment (40% portion): ~$7,700/month

• Total monthly payment: ~$18,300/month

Project Size Ranges

Minimum practical size: $250,000 (below this, costs don't justify 504 structure)
Maximum total project: $20 million+ (SBA portion capped at $5-5.5M)
SBA CDC portion cap: $5 million standard, $5.5 million for manufacturing and energy projects

Typical Michigan project sizes:

• Small projects: $500K - $1.5M (small office buildings, equipment packages)

• Medium projects: $1.5M - $5M (warehouses, medical offices, retail buildings)

• Large projects: $5M - $15M (manufacturing facilities, large distribution centers)

• Mega projects: $15M+ (major industrial facilities, campus developments)

Example of large project structure ($18M manufacturing facility):

• Bank loan: $9,000,000 (50%)

• SBA CDC loan: $5,500,000 (capped at maximum)

• Your equity: $3,500,000 (19.4%)

Fees & Closing Costs

SBA CDC processing fee: 1.5% to 2.5% of SBA CDC loan amount
Bank closing costs: $3,000 - $10,000 (varies by bank)
Third-party costs: $10,000 - $25,000 (appraisal, environmental assessment, survey, title insurance, legal)

Total closing costs: Typically 2-4% of total project cost

Example on $3 million project:

• CDC processing fee (2% of $1.2M): $24,000

• Bank closing costs: $5,000

• Third-party reports and services: $15,000

• Legal fees: $5,000

• Total closing costs: $49,000 (1.6% of project)

Important: Most closing costs can be rolled into the loan financing (you don't pay them out of pocket at closing).

The SBA 504 Process for Michigan Businesses

Average timeline: 60-90 days from application to closing

Step 1: Initial Consultation & Property Identification (Days 1-7)

What happens:

• Discuss your commercial real estate or equipment needs

• Review preliminary qualifications (credit, financials, time in business)

• Confirm property meets owner-occupancy requirements

• Explain SBA 504 structure and timeline

• Determine if 504 is the right fit vs. 7(a) or conventional

What you need:

• Property identified or parameters defined

• Basic financial information (revenue, time in business)

• Personal credit score awareness

• Understanding of your down payment capacity

Outcome: You'll know whether SBA 504 makes sense and what your approval odds are.

Step 2: Documentation Gathering & Application Preparation (Days 8-21)

What happens:

• Receive comprehensive document checklist

• Gather required business and personal documentation

• Order property appraisal

• Order Phase I environmental assessment (for real estate)

• Prepare detailed business plan and loan application package

Required documents:

Business documentation:

• Business tax returns (2 years)

• Year-to-date profit & loss statement

• Year-to-date balance sheet

• Business plan or executive summary

• Articles of incorporation / operating agreement

• Business licenses

Personal documentation:

• Personal tax returns (2 years)

• Personal financial statement

• Credit authorization

• Resume / business experience summary

Property documentation:

• Purchase agreement or letter of intent

• Property details (address, square footage, use)

• Current lease (if relocating from leased space)

• Occupancy breakdown (if mixed-use property)

This phase is critical: Proper documentation and packaging significantly impacts approval odds and timeline.

Step 3: Bank & CDC Underwriting (Days 22-50)

What happens:

• Bank conducts underwriting on their 50% portion

• Certified Development Company (CDC) underwrites SBA portion

• Both parties coordinate requirements

• Third-party reports completed (appraisal, environmental)

• Additional documentation requested if needed

• Both lenders issue preliminary approvals

Common underwriting requests:

• Updated financial statements

• Explanation of credit issues

• Additional business operational details

• Equipment quotes and specifications

• Construction budgets (for new construction)

Timeline: Most banks and CDCs complete underwriting in 20-30 days for straightforward deals.

Step 4: SBA Authorization (Days 51-75)

What happens:

• CDC submits approved loan package to SBA

• SBA reviews and authorizes the guarantee

• SBA issues authorization number

• Final closing documents prepared

• All closing conditions finalized

Timeline: SBA authorization typically takes 10-15 business days once submitted.

Step 5: Closing & Funding (Days 76-90)

What happens:

• Final documents signed by all parties

• All closing conditions satisfied

• Title work completed

• Insurance in place

• Funds disbursed

• You take ownership of property

Total typical timeline: 60-90 days

Factors that can extend timeline:

• Complex properties (environmental issues, zoning complications)

• New construction projects (more moving parts)

• Multiple properties in one transaction

• Legal complications

• Incomplete documentation

Factors that speed up timeline:

• Complete documentation upfront

• Clean environmental assessment

• Straightforward property

• Strong borrower financials

• Experienced team managing process

Michigan Industries Using SBA 504 Loans

LVRG Business Funding has facilitated SBA 504 loans for Michigan businesses across diverse industries. Here are sectors where SBA 504 loans provide exceptional value:

Manufacturing (Michigan's #1 SBA 504 Category)

Michigan's manufacturing sector—from automotive suppliers to advanced manufacturing, food processing to metal fabrication—leads the state in SBA 504 loan volume.

What Michigan manufacturers finance with 504:
✓ Production facilities and industrial buildings
✓ Manufacturing equipment and machinery
✓ Warehouse and distribution space
✓ Facility expansions and renovations

Special manufacturing advantages:

• SBA CDC portion up to $5.5 million (vs. $5M standard)

• Equipment can be included with real estate

• Job creation provides additional benefits

• Energy-efficient upgrades qualify for $5.5M cap

Recent example: Sterling Heights automotive supplier purchased 50,000 sq ft facility + $2M in equipment for $8 million total project, 10% down, doubled production capacity, added 35 jobs.

Healthcare & Medical Practices

Medical offices, dental practices, veterinary clinics, and other healthcare providers throughout Michigan use SBA 504 to purchase their buildings.

Why SBA 504 works perfectly for healthcare:
✓ Stop paying rent and build equity
✓ 100% owner-occupied (meets 504 requirement easily)
✓ Fixed rates provide predictable occupancy costs
✓ Customize space to your exact specifications
✓ Build wealth alongside practicing medicine

Recent example: Grand Rapids multi-physician medical practice purchased 12,000 sq ft office building for $2.4 million, cut occupancy costs from $22,000/month rent to $15,000/month mortgage payment, built $350,000 in equity over 5 years.

Retail & Restaurants

Stores, restaurants, franchises, and specialty retail operations purchase storefronts and standalone buildings.

Benefits for Michigan retail businesses:
✓ Lock in prime locations permanently
✓ Control renovations and facility improvements
✓ Build equity vs. paying rent that disappears
✓ Create stable, predictable occupancy costs

Recent example: Ann Arbor restaurant acquired downtown building for $1.8 million, eliminated $15,000/month rent, secured prime location permanently, building appreciated $280,000 in 4 years.

Distribution & Warehousing

Distribution centers, logistics companies, and warehousing operations purchase facilities throughout Michigan.

Why 504 works for distribution:
✓ Large buildings ($3M-$10M+) fit 504 structure perfectly
✓ Material handling equipment can be included
✓ Fixed rates provide cost stability in volatile market
✓ Stop paying rent on expensive warehouse space

Recent example: Lansing industrial distributor bought 80,000 sq ft warehouse for $5.5 million, consolidated three leased locations into one owned facility, reduced occupancy costs 35%, increased inventory capacity 200%.

Professional Services

Law firms, accounting practices, engineering firms, architecture firms, and other professional services purchase office buildings.

Advantages for professional services:
✓ Stable cash flow makes approval straightforward
✓ Typically 100% owner-occupied
✓ Tax benefits of ownership
✓ Can rent extra space to offset costs
✓ Professional image of owning your building

Recent example: Metro Detroit law firm purchased 15,000 sq ft office building for $2.4 million, rented 40% of space to complementary tenants, net occupancy cost dropped 49% vs. previous lease.

Construction & Industrial Services

General contractors, specialty contractors, and industrial service companies purchase yards, shops, and office/warehouse combinations.

What construction companies finance:
✓ Contractor yards and equipment storage
✓ Shop buildings for repairs and fabrication
✓ Office/warehouse combinations
✓ Heavy equipment alongside buildings

Recent example: Oakland County HVAC contractor purchased 25,000 sq ft shop building + yard for $3.2 million, consolidated operations, added service bays, revenue increased 40%.

Real Michigan SBA 504 Success Stories

Manufacturing Expansion – Sterling Heights

The Business: Precision metal fabrication company, $8M annual revenue, automotive and aerospace clients

The Challenge: Operating in leased 35,000 sq ft facility, outgrew capacity, landlord wouldn't allow expansion, facing need to relocate or turn down business

The SBA 504 Solution:

• Total project: $8,000,000 (land, building, equipment)

• Bank loan: $4,000,000 (50%)

• SBA CDC loan: $3,200,000 (40%)

• Down payment: $800,000 (10%)

• New facility: 65,000 sq ft owned facility

• Monthly payment: $50,700 (vs. $28,000 previous rent)

The Outcome:

• Moved to owned 65,000 sq ft facility (nearly double previous space)

• Invested $1.5M in new CNC equipment and production line

• Revenue grew from $8M to $13M in 18 months

• Added 28 employees

• Building appreciated $1.2M in 3 years

• Now has equity and expansion capacity for decades

Owner's perspective: "We were maxed out in our leased space and our landlord wouldn't let us expand. The SBA 504 loan let us buy our own building with just 10% down, and the fixed rate on 40% of the loan means we don't have interest rate risk. We went from paying $28K rent to owning a $8M facility for $51K/month—and we own it. Best decision we ever made."

Medical Practice – Grand Rapids

The Business: Multi-physician medical practice, $4.5M annual revenue, established 15 years, growing patient base

The Challenge: Paying $32,000/month rent for 10,000 sq ft, landlord selling building, practice facing relocation or massive rent increase

The SBA 504 Solution:

• Total project: $4,000,000 (building purchase + $400K renovation)

• Bank loan: $2,000,000 (50%)

• SBA CDC loan: $1,600,000 (40%)

• Down payment: $400,000 (10%)

• Building: 12,000 sq ft medical office building

• Monthly payment: $25,300

The Outcome:

• Purchased 12,000 sq ft building (20% more space than leased)

• Saved $6,700/month in occupancy costs ($80,400 annually)

• Customized facility to exact specifications

• Built $400,000 in equity over 5 years

• Eliminated landlord risk permanently

• Now planning second location

Owner's perspective: "We were at the mercy of our landlord. When he decided to sell, we faced either relocating our established practice or paying whatever he wanted. The SBA 504 loan let us buy our own building with just $400K down on a $4M property. Now we're building equity, our costs are lower than our old rent, and we control our destiny."

Distribution & Logistics – Lansing

The Business: Industrial supply distributor, $6M annual revenue, serving manufacturing sector statewide

The Challenge: Operating from three leased warehouses totaling 50,000 sq ft, inefficient operations, combined rent $42,000/month, limited growth capacity

The SBA 504 Solution:

• Total project: $5,300,000 (land + 80,000 sq ft warehouse + equipment)

• Bank loan: $2,650,000 (50%)

• SBA CDC loan: $2,120,000 (40%)

• Down payment: $530,000 (10%)

• Monthly payment: $33,800

The Outcome:

• Consolidated three leased locations into one owned 80,000 sq ft facility

• Saved $8,200/month in occupancy costs ($98,400 annually)

• Doubled inventory capacity

• Improved operational efficiency by 40%

• Revenue increased from $6M to $9.2M in 30 months

• Building appreciated $750,000 in 4 years

• Added 15 employees

Owner's perspective: "Running three separate warehouses was killing our efficiency and our profitability. The SBA 504 loan let us buy one large facility that's 60% bigger than our combined leased space—for less than we were paying in rent. We doubled our inventory, streamlined operations, and our revenue grew 50%. The business transformation was incredible."

Restaurant Group – Ann Arbor

The Business: Established restaurant, $2.8M annual revenue, prime downtown location, 20-year successful operation

The Challenge: Landlord raising rent from $15,000/month to $22,000/month, building for sale, restaurant risked losing prime location or facing massive rent increase

The SBA 504 Solution:

• Total project: $1,800,000 (building purchase + kitchen upgrades)

• Bank loan: $900,000 (50%)

• SBA CDC loan: $720,000 (40%)

• Down payment: $180,000 (10%)

• Building: 5,000 sq ft downtown restaurant building

• Monthly payment: $11,500

The Outcome:

• Purchased building in prime downtown Ann Arbor location

• Monthly payment of $11,500 vs. proposed $22,000 rent (saved $10,500/month)

• Saved $126,000 annually in occupancy costs

• Controlled property for future expansion or sale

• Building appreciated $280,000 in 4 years

• Secured location permanently in high-demand area

Owner's perspective: "Our landlord was going to more than double our rent. After 20 years building our business, we were going to lose our location or pay an impossible rent. The SBA 504 loan saved our business. We bought the building for less than the proposed rent, and now we own a valuable downtown property that's appreciated significantly. We're building wealth, not making a landlord rich."

Frequently Asked Questions: SBA 504 Loans in Michigan

Can I use an SBA 504 loan to buy a business?

No. SBA 504 loans can ONLY be used for commercial real estate and equipment—not business acquisitions.

If you want to buy a business, you need an SBA 7(a) loan instead. If you want to buy a business AND the real estate it operates from, you can structure the transaction with an SBA 7(a) loan that covers both the business purchase and the real estate.

Can I include working capital in an SBA 504 loan?

No. SBA 504 loans are strictly for real estate and equipment purchases. They cannot include working capital.

If you need working capital along with real estate or equipment, an SBA 7(a) loan is the right choice. The 7(a) program allows you to finance real estate, equipment, AND working capital in a single loan.

Can I rent part of my building to other tenants?

Yes, as long as you occupy at least 51% of the property for your own business operations.

You can rent up to 49% of the space to other tenants. The rental income can actually help you qualify by reducing your net occupancy cost.

Examples:

• You buy a 10,000 sq ft building, use 6,000 sq ft (60%) for your business, rent 4,000 sq ft to tenants ✓

• You buy a mixed-use building with retail on first floor and apartments above, and your business occupies 55% of total square footage ✓

• You buy a building intending to occupy it 100% now, but might rent part of it in the future ✓

How long does it take to close an SBA 504 loan?

Typical timeline: 60-90 days from complete application to closing

Breakdown:

• Documentation and application: 7-14 days

• Bank and CDC underwriting: 20-30 days

• SBA authorization: 10-15 days

• Closing preparation and funding: 10-15 days

Factors that extend timeline:

• Environmental issues requiring remediation

• Complex properties or new construction

• Incomplete documentation

• Multiple properties in one transaction

Factors that speed up timeline:

• Complete documentation upfront

• Clean environmental assessment

• Strong borrower financials

• Straightforward property

• Experienced team managing the process

What credit score do I need for an SBA 504 loan?

680+ credit score is strongly preferred for SBA 504 loans.

650-680 is possible with strong compensating factors:

• Excellent cash flow (1.4x+ DSCR)

• Substantial collateral

• Long time in business (5+ years)

• Large down payment (15-20%)

• Clean explanation for credit issues

Below 650 is very difficult for SBA 504. You'd need exceptional business strength and compensating factors, or you should focus on improving credit before applying.

Can I refinance my existing commercial mortgage with an SBA 504 loan?

Generally no, unless combined with substantial expansion or improvement.

SBA 504 loans are designed for purchasing real estate and equipment—not refinancing existing debt.

Exception: If you're refinancing AND making a substantial improvement (typically 15-20%+ new investment in expansion, renovation, or equipment), refinancing may be allowed as part of a larger 504 project.

Example that works:

• Current building value: $2M with $1.5M mortgage

• Major expansion adding $1M (50% new investment)

• Total project: $3M

• Can refinance existing $1.5M mortgage + finance $1M expansion

Example that doesn't work:

• Current building value: $2M with $1.5M mortgage at 8%

• Want to refinance to lower rate

• No expansion or substantial improvement

• This doesn't qualify for SBA 504

For straight refinancing without expansion, consider conventional refinancing or explore whether SBA 7(a) debt refinancing might work.

What happens if I'm declined by one bank for SBA 504?

A decline from one bank doesn't mean you don't qualify for SBA 504.

Different banks have different:

• Credit risk appetites

• Industry preferences

• Geographic focus areas

• Loan size sweet spots

• Portfolio capacity at any given time

We've funded hundreds of Michigan businesses that were initially declined elsewhere by matching them with the right bank and CDC combination and properly packaging their applications.

If you're declined, the key is understanding why and either addressing the issue or finding a better-fit lender.

Can a startup business get an SBA 504 loan?

Very difficult, but not impossible.

Startups face significant hurdles for SBA 504:

• Need 15-20% down payment (vs. 10% for established businesses)

• Require 700+ credit score

• Must demonstrate significant industry experience (typically 5+ years)

• Need comprehensive business plan with realistic projections

• Face much greater scrutiny

Most startups are better served by:

• SBA 7(a) loans (more startup-friendly)

• Conventional financing

• Building business history (operate 2+ years), then apply for 504

If you're a startup, we'll be honest about your approval odds and recommend the best path forward.

What if my business doesn't meet the 51% occupancy requirement?

Then SBA 504 doesn't work for you.

The 51% owner-occupancy requirement is non-negotiable for SBA 504 loans. If you can't or won't occupy at least 51% of the property for your own business operations, you need a different financing solution:

Alternatives:

• Conventional commercial mortgage

• Portfolio loans from community banks

• Private commercial lenders

• CMBS loans (for larger properties)

Ready to Purchase Your Michigan Commercial Real Estate with SBA 504?

Stop paying rent. Stop building someone else's equity. Stop worrying about lease renewals and landlord decisions.

Start building wealth. Start owning your business future. Start controlling your destiny.

SBA 504 loans provide Michigan businesses with:

• ✓ 10% down payment (not 30%)

• ✓ Fixed rates for 25 years (not variable rates that adjust)

• ✓ No balloon payments (fully amortized)

• ✓ Lower monthly payments (vs. conventional financing)

• ✓ Preserved working capital (less cash required upfront)

Three Ways to Get Started

1. Call Our Michigan SBA 504 Team 📞 (855) 998-5874

Speak directly with an SBA 504 specialist who understands Michigan commercial real estate. Available Monday-Friday, 9am-6pm EST.

2. Email Your Property Details ✉️ info@lvrgllc.com

Tell us about the property you want to buy and your business. We respond within 24 hours with preliminary feedback and next steps.

3. Complete Our Quick Form

We'll contact you within 24 hours with a preliminary assessment and next steps.

What Happens Next

Within 24 hours of contacting us:

• ✓ Know whether you qualify for SBA 504 financing

• ✓ Estimated loan structure and monthly payments

• ✓ Timeline to closing

• ✓ Documentation requirements

• ✓ Next steps

Within 60-90 days:

• ✓ You close on your property

• ✓ You own your building

• ✓ You stop paying rent

• ✓ You start building equity

About LVRG Business Funding

LVRG Business Funding is Michigan's trusted partner for SBA 504 loans and commercial real estate financing. Based in Metro Detroit with deep roots throughout Michigan, we've spent over 20 years helping Michigan businesses stop paying rent and start building wealth through commercial real estate ownership.

Our SBA 504 Approach:

• No cost to you: Lenders compensate us—you get expert guidance at zero cost

• CDC and bank network: Strategic relationships with Michigan's most capable SBA 504 lenders

• Michigan expertise: Deep understanding of Michigan commercial real estate markets

• Proven results: $1 billion+ facilitated in business financing for 10,000+ companies

Our SBA 504 Specialization:

• Manufacturing facilities (Michigan's #1 504 category)

• Medical and dental office buildings

• Warehouses and distribution centers

• Retail buildings and storefronts

• Office buildings for professional services

• Mixed-use properties

• Equipment financing alongside real estate

Michigan Markets We Serve: Detroit, Sterling Heights, Warren, Troy, Livonia, Dearborn, Westland, Farmington Hills, Southfield, Royal Oak, Grand Rapids, Ann Arbor, Lansing, Kalamazoo, Flint, Battle Creek, and throughout Michigan's 83 counties.

Ready to stop paying rent and own your building? Contact LVRG Business Funding today.

📞 (855) 998-5874 | ✉️ info@lvrgllc.com

This guide is for informational purposes only and does not constitute financial advice. SBA 504 loan terms, rates, and requirements are subject to change and depend on individual borrower qualifications, property characteristics, and lender criteria. LVRG Business Funding works with Certified Development Companies (CDCs) and SBA-approved lenders to facilitate SBA 504 financing but is not itself a lender or CDC.

The Complete Guide to SBA 7(a) Loans in Michigan: How to Finance Your Business Acquisition, Real Estate, Equipment, Working Capital, or Expansion in 2026

Last Updated: January 2026 | Reading Time: 18 minutes

If you're a Michigan business owner looking to acquire a competitor, purchase commercial real estate, finance equipment, or fuel your expansion, understanding SBA 7(a) loans could save you hundreds of thousands of dollars and unlock opportunities that conventional financing can't match.

This comprehensive guide covers everything Michigan business owners need to know about SBA 7(a) loans—from qualification requirements and interest rates to real-world success stories from Detroit to Grand Rapids.

Table of Contents

1. What Is an SBA 7(a) Loan?

2. Why Michigan Businesses Choose SBA 7(a) Loans

3. SBA 7(a) Loan Requirements in Michigan

4. How to Use SBA 7(a) Loans

5. Rates, Terms & Structure

6. SBA 7(a) vs. 504 vs. Conventional Loans

7. The Application Process

8. Common Mistakes to Avoid

9. Michigan Industry Focus

10. Success Stories

11. Frequently Asked Questions

What Is an SBA 7(a) Loan? Understanding Michigan's Most Versatile Business Financing Tool

The SBA 7(a) loan program is the U.S. Small Business Administration's flagship financing solution, designed specifically for established businesses that need growth capital but don't qualify for conventional bank loans—or simply want better terms than traditional lenders offer.

For Michigan business owners from Sterling Heights to Kalamazoo, SBA 7(a) loans have become the go-to financing vehicle for major business moves: buying out competitors, purchasing your building instead of paying rent, upgrading equipment, or securing the working capital needed to scale operations.

How SBA 7(a) Loans Work

Here's what makes them different from conventional business loans:

The SBA doesn't lend money directly. Instead, the Small Business Administration guarantees 75-85% of loans made by approved lenders. This government backing reduces lender risk, which translates to better terms for you:

✓ Larger loan amounts: Up to $5 million (vs. $500K-$1M typical for conventional loans)
✓ Longer repayment terms: Up to 25 years for real estate, 10 years for equipment and working capital
✓ Lower down payments: As low as 10% (vs. 20-30% conventional)
✓ More flexible underwriting: Businesses declined for conventional loans often get approved for SBA 7(a)
✓ Versatile use of funds: Working capital, acquisitions, real estate, equipment, refinancing—almost any business need

Current Michigan SBA 7(a) Market Snapshot (Q4 2025)

• Total loans funded: 388 SBA loans in Michigan totaling $204 million

• Average loan amount: $526,749

• Average interest rate: 9.6% (down from 10.5% in 2024)

• Top uses: Business acquisitions (42%), commercial real estate (28%), equipment/expansion (30%)

From Detroit automotive suppliers buying competitors to Grand Rapids restaurants acquiring prime downtown locations, Michigan businesses are leveraging SBA 7(a) loans to execute strategic moves that build long-term wealth.

Why Michigan Business Owners Choose SBA 7(a) Loans Over Conventional Financing

1. Maximum Flexibility: Use the Money for Almost Anything

Unlike the more restrictive SBA 504 program (real estate and equipment only) or conventional loans with their use limitations, SBA 7(a) loans can finance virtually any legitimate business purpose:

Business Acquisitions

• Buying an existing business or franchise

• Acquiring competitors in Metro Detroit, Ann Arbor, or statewide

• Purchasing supplier companies or distribution operations

• Buying out business partners

Commercial Real Estate

• Owner-occupied office buildings, warehouses, retail spaces

• Manufacturing facilities across Michigan's industrial corridor

• Mixed-use properties (you occupy 51%+)

• Land purchase + construction

Equipment & Machinery

• Manufacturing equipment for Michigan's industrial base

• Construction equipment (excavators, loaders, specialized vehicles)

• Medical equipment for healthcare practices

• Commercial kitchen equipment for restaurants

• Delivery fleets and transportation assets

Working Capital & Growth

• Hiring staff for expansion

• Inventory for seasonal businesses (especially critical in Michigan's climate)

• Marketing and sales expansion

• Entering new markets

• Bridging receivables gaps

Debt Refinancing

• Consolidating high-interest business debt

• Restructuring merchant cash advances (MCAs)

• Converting short-term debt to long-term, affordable payments

Industry-Specific Applications

• Liquor store acquisitions and inventory financing

• Gas station purchases and equipment upgrades

• Car wash acquisitions and facility improvements

• Restaurant and bar buildouts

• Franchise fees and initial inventory

2. Longer Terms = Lower Monthly Payments = Better Cash Flow

This is where SBA 7(a) loans shine for Michigan businesses:

Real Estate: SBA 7(a) offers up to 25 years vs. conventional 15-20 years with balloon payments Equipment: SBA 7(a) offers up to 10 years vs. conventional 3-7 years
Working Capital: SBA 7(a) offers up to 10 years vs. conventional 1-3 years Acquisitions: SBA 7(a) offers 10-25 years (depending on assets) vs. conventional 5-7 years

Real-World Impact:

A $1 million loan at 10% interest:

• 25-year term: $9,087/month

• 15-year term: $10,746/month

• Monthly savings: $1,659

• Annual cash flow improvement: $19,908

For a Sterling Heights manufacturer buying a competitor or a Troy restaurant group acquiring a second location, that extra $20K annually in cash flow can mean the difference between thriving and just surviving.

3. Lower Down Payments Preserve Operating Capital

SBA 7(a) Down Payments: Typically 10-15%
Conventional Down Payments: 20-30%
The Difference: Critical

Example: $2 million business acquisition

• SBA 7(a) down payment: $200,000-$300,000

• Conventional down payment: $400,000-$600,000

• Cash preserved: $100,000-$400,000

That preserved capital pays for:

• Post-acquisition working capital

• Inventory and supplies

• Staff retention bonuses

• Marketing and rebranding

• Equipment upgrades

• Unexpected expenses during transition

For Michigan business owners acquiring liquor stores in Macomb County, manufacturing companies in Wayne County, or medical practices in Grand Rapids, preserving cash isn't optional—it's essential for successful transitions.

4. Government Guarantee = Better Approval Odds

The SBA's 75-85% guarantee fundamentally changes the lending equation.

What this means in practice:

Banks that decline your conventional loan application often approve the exact same deal as an SBA 7(a) loan because the government absorbs most of the risk.

Common scenarios where 7(a) gets approved and conventional doesn't:

✓ Credit scores 650-720 (good but not "excellent")
✓ Businesses with 2-5 years of history (proven but not "seasoned")
✓ Industries banks consider risky (restaurants, construction, retail)
✓ Higher leverage ratios (more debt but strong cash flow)
✓ Limited collateral (cash flow is strong but assets are minimal)

This is why Detroit business owners declined by Chase or PNC often get approved through specialized SBA 7(a) lenders who understand how to structure and present these deals.

5. Competitive Rates That Beat Most Alternatives

Myth: Government-backed loans have higher interest rates.
Reality: SBA 7(a) rates are often lower than conventional alternatives.

Current Michigan market (2026):

• SBA 7(a) loans: Averaging 9.6%

• Conventional commercial loans: 10-14% for similar businesses

• Alternative financing (MCAs, short-term): 20-80% APR

Your actual rate depends on:

• Loan size (larger loans get better pricing)

• Credit strength (750+ scores get best rates)

• Business financials (stronger = lower rate)

• Collateral and down payment

• Which lender you work with (this is critical—rates vary 0.5-1.5% between lenders for identical deals)

SBA 7(a) Loan Requirements in Michigan: Do You Qualify?

Basic Eligibility Criteria

✓ For-profit business (nonprofits don't qualify)
✓ Operating in the United States
✓ Owner has invested equity in the business
✓ Small business by SBA standards (typically <500 employees; varies by industry)
✓ Exhausted other financing options (can't get reasonable conventional financing)

Credit Score Requirements

680-850 (Strong candidate): Standard approval process
650-679 (Good candidate): May need stronger cash flow or collateral
620-649 (Possible with compensating factors): Requires exceptional business strength
Below 620 (Very difficult): Typically not approved without major compensating factors

Compensating factors that help lower credit scores:

• Strong cash flow (1.5x+ debt service coverage)

• Significant collateral

• Larger down payment (20%+)

• Long time in business (5+ years)

• Excellent business credit

• Clean explanation for credit issues

Credit issues that CAN be overcome:

• Past late payments (if resolved and explained)

• Prior bankruptcies (if discharged 2+ years ago)

• Collections or judgments (if paid or in repayment)

• High credit utilization (if cash flow supports new debt)

Credit issues that are DIFFICULT to overcome:

• Recent bankruptcies (within 1-2 years)

• Current judgments or tax liens

• IRS tax liens

• Recent foreclosures

• Fraud or felony convictions related to financial matters

Business Requirements

Time in Business:

• Preferred: 2+ years in operation with tax returns

• Possible for newer businesses: Franchise acquisitions, business purchases, or startups with significant industry experience

Revenue Requirements:

• Typical minimum: $250,000+ annual revenue

• Varies by: Loan size and purpose

• For acquisitions: The business you're buying contributes its revenue to the equation

Profitability & Cash Flow:

Lenders want to see debt service coverage ratio (DSCR) of 1.25x or higher

This means: Your business cash flow should be at least 125% of all debt payments (existing + new SBA loan)

Example:

• Monthly cash flow available for debt: $15,000

• Existing debt payments: $3,000/month

• New SBA 7(a) payment would be: $8,000/month

• Total debt payments: $11,000/month

• DSCR: $15,000 ÷ $11,000 = 1.36x ✓ (Approved)

Industry Considerations

Most industries qualify, but some face restrictions:

Excluded Industries:

• Lending/investment businesses

• Speculative real estate

• Gambling operations

• Multi-level marketing

Restricted (but possible with proper structure):

• Startups without established cash flow

• Passive income businesses (some rental properties)

• Businesses with owners who have other failed businesses

Preferred Industries in Michigan:

• Manufacturing and industrial operations

• Healthcare and medical practices

• Restaurants and hospitality

• Retail and specialty stores (including liquor stores, gas stations, convenience stores)

• Construction and trade contractors

• Professional services

• Automotive services and car washes

• Distribution and logistics

Collateral Requirements

SBA 7(a) loans are secured loans—lenders take collateral to protect their investment.

Primary Collateral:

• Assets purchased with loan proceeds (real estate, equipment, inventory)

• Existing business assets (machinery, vehicles, receivables)

• Personal real estate (if business collateral is insufficient)

Critical SBA Policy: "Lack of collateral will not be the sole reason for declining an SBA loan if the borrower can demonstrate repayment ability."

In practice: Lenders prefer 80-100% collateral coverage, but they'll approve loans with less if cash flow is strong.

Personal Guarantee

All owners with 20%+ ownership must personally guarantee the loan.

This means: If the business defaults, you are personally liable.

This is standard for SBA loans and most conventional business loans.

For business acquisitions: Sellers sometimes provide a limited guarantee or seller note, which strengthens the deal structure.

How Michigan Businesses Use SBA 7(a) Loans: Strategic Applications

1. Business Acquisitions: The #1 Use Case

Buying an existing business is the most common and most strategic use of SBA 7(a) loans in Michigan.

What you can finance:

• Purchase price (up to 90% of business value)

• Working capital for post-acquisition operations

• Inventory and receivables

• Equipment and furniture included in sale

• Real estate (if part of the acquisition)

Why SBA 7(a) beats conventional acquisition financing:

Down payment: SBA 7(a) requires 10-15% vs. conventional 30-50%
Term length: SBA 7(a) offers 10-25 years vs. conventional 5-7 years
Working capital: SBA 7(a) includes working capital; conventional typically doesn't
Seller financing: SBA 7(a) allows seller financing; conventional has limited options

Michigan Business Acquisition Examples:

Metro Detroit Manufacturing: Precision machining company acquires competitor for $2.5M

• Purchase price: $2,500,000

• SBA 7(a) loan: $2,250,000 (90%)

• Buyer down payment: $250,000 (10%)

• Term: 10 years at 9.8%

• Monthly payment: $28,924

• Result: Doubled capacity, added $4M annual revenue

Oakland County Liquor Store: Buyer acquires established party store

• Purchase price: $875,000

• SBA 7(a) loan: $787,500 (90%)

• Buyer down payment: $87,500 (10%)

• Term: 10 years at 10.1%

• Monthly payment: $10,400

• Result: Maintained customer base, improved margins 18%, business now worth $1.3M

Grand Rapids Medical Practice: Physician buys retiring doctor's practice

• Purchase price: $1,200,000

• SBA 7(a) loan: $1,080,000 (90%)

• Buyer down payment: $120,000 (10%)

• Term: 15 years (real estate included) at 9.9%

• Monthly payment: $11,300

• Result: Acquired patient base generating $850K annual revenue, owns building

2. Commercial Real Estate: Build Wealth Instead of Paying Rent

Owner-occupied commercial real estate is one of the most wealth-building uses of SBA 7(a) loans.

What qualifies:

• Office buildings, retail spaces, warehouses, manufacturing facilities

• Mixed-use properties (you occupy 51%+ of space)

• Land purchase + construction

• Purchase + renovation

Requirements:

• Must be owner-occupied (you use 51%+ for your business)

• Must be your primary operating location

• Cannot be investment property or passive rental

Why SBA 7(a) beats conventional commercial mortgages:

✓ 10-15% down vs. 25-35% conventional
✓ 25-year full amortization vs. 15-20 years with balloon
✓ Can include working capital and equipment in same loan
✓ Fixed or variable rate options

Michigan Examples:

• Sterling Heights warehouse: Manufacturing company purchases 25,000 sq ft facility, $1.8M loan, reduces occupancy costs 30%

• Ann Arbor medical office: Practice buys 8,000 sq ft building, $1.2M loan, stops paying $8,000/month rent, builds equity

• Detroit restaurant: Chef-owner acquires downtown property, $950K loan, locks in prime location in appreciating market

3. Equipment Financing: Longer Terms, Lower Payments

Michigan's manufacturing, construction, and industrial businesses use SBA 7(a) loans for major equipment purchases.

What you can finance:

• Manufacturing machinery and production equipment

• Construction equipment (excavators, loaders, trucks, specialized vehicles)

• Medical equipment (MRI machines, surgical equipment, dental chairs)

• Restaurant equipment (commercial kitchens, ovens, refrigeration)

• Car wash equipment and systems

• Technology and software systems

• Delivery and transportation fleets

SBA 7(a) equipment advantages:

• Up to 10 years (vs. 3-5 years conventional)

• Lower monthly payments preserve cash flow

• Can finance multiple equipment purchases in one loan

• Can include installation, training, and related costs

Example: Lansing Construction Company

• Equipment cost: $750,000 (excavators, loaders, dump trucks)

• SBA 7(a) loan: $675,000 (90%)

• Down payment: $75,000 (10%)

• Term: 10 years at 10.2%

• Monthly payment: $8,923

• Result: Expanded capacity, secured $2.1M in new contracts, increased revenue 45%

4. Working Capital & Business Expansion

Growing Michigan businesses need working capital to:

• Hire additional staff

• Purchase inventory (especially for seasonal Michigan businesses)

• Expand marketing and sales

• Enter new markets or product lines

• Fund receivables (bridge payment gaps)

SBA 7(a) working capital advantages:

• Up to $5 million in capital

• 10-year terms (vs. 1-3 years conventional working capital)

• Lower monthly payments

• One-time infusion (not revolving debt)

Example: Grand Rapids Distribution Company

• Working capital: $500,000

• Use: Hire 8 new employees, increase inventory, expand territory

• Term: 10 years at 9.9%

• Monthly payment: $6,594

• Result: Revenue grew from $2.8M to $4.2M in 18 months

5. Debt Refinancing: Improve Cash Flow

Refinancing existing business debt with an SBA 7(a) loan can dramatically reduce monthly payments and interest expense.

What you can refinance:

• Existing business loans with high interest rates

• Multiple debts consolidated into one payment

• Short-term debt restructured to long-term

• Merchant cash advances (MCAs)

• Business credit cards and lines of credit

Requirements:

• Existing debt must be business-related (not personal)

• Must demonstrate clear benefit (lower rate, lower payment, or both)

• Must be current on existing debt

Example: Detroit Restaurant Group

• Before refinancing:

  • $250K term loan at 14% interest

  • $100K merchant cash advance at 42% APR

  • $50K business credit cards at 18%

  • Total monthly payments: $11,200

• After SBA 7(a) refinancing:

  • New loan: $400K at 10%, 10 years

  • New monthly payment: $5,279

  • Monthly savings: $5,921

  • Annual cash flow improvement: $71,052

6. Franchise Purchases: Fast-Track to Business Ownership

Buying a franchise is one of the easiest ways to qualify for an SBA 7(a) loan because franchises have:

• Proven business models

• Established brand recognition

• Predictable performance data

• Built-in support systems

What SBA 7(a) loans finance for franchises:

• Franchise fee

• Initial inventory and equipment

• Leasehold improvements and buildout

• Working capital for first 6-12 months

• Real estate (if purchasing the property)

Requirements:

• Franchise must be on SBA's approved franchise directory (most major franchises are)

• Franchisee must meet franchisor's qualifications

• Relevant industry experience helpful but not always required

Popular Michigan franchises financed through SBA 7(a):

• Fast food and quick service restaurants (Jimmy John's, Subway, Taco Bell)

• Full-service restaurants

• Automotive services (Jiffy Lube, Midas, Meineke, car washes)

• Fitness centers (Planet Fitness, Anytime Fitness)

• Senior care and home healthcare

• Commercial cleaning and janitorial

SBA 7(a) Loan Rates, Terms & Structure: What to Expect

Loan Amounts: $150,000 to $5,000,000

Minimum: While the SBA doesn't set a minimum, most lenders require $150,000+ for 7(a) loans due to processing costs and complexity.

Maximum: $5,000,000 (SBA's maximum guarantee amount)

Sweet spot: Most Michigan lenders are most competitive in the $250,000 to $2,000,000 range.

Need more than $5M? Consider:

• USDA B&I loans (rural Michigan businesses, up to $25M)

• Conventional commercial loans

• Combining multiple financing sources

Interest Rates: Currently 9-11% for Most Michigan Businesses

SBA 7(a) rates are based on: Prime Rate + Lender Spread

Current Michigan market (2026):

• Prime rate: 7.5%

• Average SBA 7(a) rate: 9.6%

• Typical range: 9.0% to 11.5%

SBA maximum allowed spreads:

• Loans under $25K: Prime + up to 4.75%

• Loans $25K-$50K: Prime + up to 4.5%

• Loans $50K+: Prime + up to 2.75%

What determines your specific rate:

Credit score (750+ vs. 650): Can impact rate by 0.5-1.0%
Business strength: Can impact rate by 0.25-0.75%
Collateral/down payment: Can impact rate by 0.25-0.5%
Time in business: Can impact rate by 0.25-0.5%
Industry: Can impact rate by 0.25-0.5%
Which lender: Can impact rate by 0.5-1.5% (this is huge)

Fixed vs. Variable Rates:

• Variable rates: Tied to prime, adjust quarterly (most common for SBA 7(a))

• Fixed rates: Locked for life of loan (typically 0.25-0.5% higher than variable)

Example rate scenarios:

• Strong borrower (750+ credit, 5+ years, strong cash flow): Prime + 2.5% = 10.0%

• Good borrower (680 credit, 3 years, adequate cash flow): Prime + 3.25% = 10.75%

• Acceptable borrower (650 credit, 2 years, minimal cushion): Prime + 4.0% = 11.5%

Repayment Terms

Commercial Real Estate: Up to 25 years
Equipment: Up to 10 years (or useful life of equipment, whichever is less)
Working Capital: Up to 10 years
Business Acquisitions: 10 years (or 25 years if real estate is included)

All SBA 7(a) loans are fully amortizing—no balloon payments.

You know your exact monthly payment for the life of the loan (fixed rate) or can predict it based on prime rate (variable rate).

Down Payment Requirements

Typical: 10-15% of total project cost

Factors affecting down payment:

Strong borrower: 10% down
Average borrower: 10-15% down
Weaker borrower: 15-20% down
Business acquisition: 10% down (seller financing can supplement)
Real estate purchase: 10-15% down

Example: $1,000,000 business acquisition

• Purchase price: $1,000,000

• SBA 7(a) loan: $900,000 (90%)

• Buyer down payment: $100,000 (10%)

Fees & Closing Costs

SBA Guarantee Fee (paid to SBA):

• Loans ≤$150K: 0% to 2%

• Loans $150,001 to $700,000: 3%

• Loans >$700,000: 3.5% (portion up to $1M), 3.75% (portion over $1M)

Lender Fees:

• Packaging fee

• Underwriting fee

• Closing costs

• Typical total: $2,500 to $7,500 depending on loan size

Important: Fees are typically rolled into the loan amount (you don't pay out of pocket)

Example for $500,000 loan:

• SBA guarantee fee: $15,000 (3%)

• Lender closing costs: $5,000

• Total fees: $20,000

• Amount financed: $520,000

Personal Guarantee & Collateral

Personal Guarantee:

• Required from all owners with 20%+ ownership

• Makes owners personally liable if business defaults

• Standard for SBA loans and most conventional business loans

Collateral:

• First lien on assets purchased with loan proceeds (real estate, equipment, inventory)

• May require additional collateral (existing business assets, personal real estate)

• SBA policy: Loans will not be declined solely for lack of collateral if repayment ability is demonstrated

SBA 7(a) vs. SBA 504 vs. Conventional Loans: Which Is Right for Your Michigan Business?

When to Choose SBA 7(a)

Choose SBA 7(a) if:

• ✓ You're acquiring a business (504 doesn't allow acquisitions)

• ✓ You need working capital along with real estate or equipment

• ✓ You want faster closing (7(a) closes quicker than 504)

• ✓ You prefer dealing with one lender vs. multiple parties (504 involves CDC + lender)

• ✓ Your project is under $1 million (7(a) is simpler for smaller deals)

When to Choose SBA 504

Choose SBA 504 if:

• ✓ You're ONLY buying real estate or equipment (no working capital needed)

• ✓ You want a fixed rate for 25 years (eliminates rate risk)

• ✓ Your project is $1 million+ (504 structure saves money on larger real estate deals)

• ✓ You're in manufacturing (504 offers advantages for manufacturing businesses)

Note: Many Michigan businesses start with 7(a) for acquisitions or mixed-use financing, then use 504 later for real estate-only projects.

SBA 7(a) vs. Conventional Bank Loans

Conventional loans are faster and simpler—IF you qualify.

Most Michigan businesses don't qualify for conventional financing at favorable terms, which is why SBA 7(a) loans exist.

SBA 7(a) Advantages:

• Down payment: 10-15% vs. conventional 20-30%

• Term length: 10-25 years vs. conventional 5-15 years, often with balloon payments

• Loan amount: Up to $5M vs. conventional varying, typically $500K-$2M max

• Approval criteria: More flexible vs. conventional more stringent

• Credit score: 650+ possible vs. conventional 720+ typically required

• Time to close: 45-60 days vs. conventional 30-45 days

• Use restrictions: Very flexible vs. conventional more restrictive

• Prepayment penalty: Minimal/none vs. conventional often significant

When conventional makes sense:

• Exceptional credit (750+)

• 10+ years in business

• Strong collateral

• Lower leverage needs

• Need to close in 30 days or less

The SBA 7(a) Loan Process: From Application to Funding

Average timeline: 45-60 days for most Michigan businesses

Step 1: Initial Consultation & Qualification (Days 1-3)

What happens:

• Discuss your business, financing needs, and strategic goals

• Review preliminary qualification criteria (credit, revenue, time in business)

• Determine optimal loan amount and structure

• Explain timeline and expectations

What you need:

• Basic business information (revenue, years in operation, ownership structure)

• Personal credit score awareness

• Clear understanding of financing need and amount

Outcome: You'll know whether SBA 7(a) financing makes sense and what your approval odds are.

Step 2: Document Gathering & File Packaging (Days 4-14)

What happens:

• Receive document checklist

• Gather required documentation

• Expert review and organization

• Comprehensive loan package preparation

Required documents:

Personal:

• Personal tax returns (2 years)

• Personal financial statement

• Credit authorization form

• Resume/business experience summary

Business:

• Business tax returns (2 years)

• Year-to-date financial statements (P&L, balance sheet)

• Business plan or executive summary

• Articles of incorporation/operating agreement

• Business licenses

Project-specific:

• Purchase agreement (if buying a business)

• Lease agreement (if leasing equipment or space)

• Property details and purchase contract (if buying real estate)

• Equipment quotes and specifications

Why professional packaging matters:

A well-packaged loan file:

• Highlights business strengths

• Proactively addresses potential concerns

• Presents information in lender-preferred format

• Significantly increases approval odds

This is the difference between approval and decline for borderline deals.

Step 3: Pre-Underwriting & Lender Selection (Days 15-21)

What happens:

• Internal pre-underwriting to identify potential issues

• Determination of best-fit lenders from network

• Outreach to 2-4 lenders to gauge interest and pricing

• Selection of optimal lender(s)

Why this matters:

Different SBA 7(a) lenders have different:

• Credit appetites: Some require 680+, others accept 650+

• Industry preferences: Some love restaurants, others avoid them

• Loan size sweet spots: Some prefer $500K-$2M, others $250K-$1M

• Rate pricing: Can vary by 0.5-1.5% for identical deals

Strategic lender matching significantly improves:

• Approval odds

• Interest rate

• Terms and structure

• Speed to closing

Step 4: Lender Submission & Underwriting (Days 22-35)

What happens:

• Submit complete package to selected lender(s)

• Lender conducts full underwriting review

• Additional documentation requests (if needed)

• Management of all communication and follow-up

Common underwriting requests:

• Updated financial statements

• Explanation of specific credit issues

• Additional business operational details

• Third-party reports (appraisal, environmental assessment, business valuation)

Timeline: Most lenders complete underwriting in 10-15 days for SBA 7(a) loans.

Step 5: SBA Approval & Closing Preparation (Days 36-50)

What happens:

• Lender submits approved loan to SBA for guarantee

• SBA reviews and issues guarantee (typically 5-7 days for preferred lenders)

• Lender issues commitment letter

• Closing documents prepared

• Third-party reports ordered and completed (appraisal, environmental, title work)

You'll receive:

• Loan commitment letter outlining final approved terms

• Closing checklist

• Clear timeline to funding

Step 6: Closing & Funding (Days 51-60)

What happens:

• Final documents signed

• All closing conditions satisfied

• Lender wires funds to appropriate parties

• Transaction closes

Total typical timeline: 45-60 days

Complex transactions may take 60-90 days:

• Multiple properties

• Business acquisitions with complicated structures

• Environmental issues requiring remediation

• Legal complications

Compare to going direct:

• Average time: 75-120 days

• Businesses often contact 10-20 lenders before finding approval

• Many give up after multiple declines

Professional facilitation is faster because:

• Files packaged correctly the first time

• Pre-underwriting catches issues early

• Right lenders approached (no wasted submissions)

• Expert management of entire process

7 Common Mistakes Michigan Business Owners Make with SBA 7(a) Loans

Mistake #1: Approaching the Wrong Lenders

The Problem: Business owners call household-name banks (Chase, Wells Fargo) because they're familiar. These mega-banks cherry-pick only perfect deals and decline 80%+ of SBA applications.

The Solution: Different lenders have different:

• Credit risk appetites

• Industry preferences

• Loan size sweet spots

• Geographic focus areas

• Portfolio availability

Approaching 3-5 strategically selected lenders dramatically improves approval odds and pricing.

Mistake #2: Poor Documentation & File Presentation

The Problem: Incomplete applications or disorganized documentation signals unprofessionalism and increases decline risk.

The Solution: Professional loan packaging presents your business in the best possible light:

• Organized, complete documentation

• Narrative that tells your business story

• Proactive addressing of potential concerns

• Lender-friendly format and presentation

For borderline deals, this is often the difference between approval and decline.

Mistake #3: Applying for the Wrong Amount

The Problem:

• Too much: Exceeds what cash flow can support → decline

• Too little: Insufficient to accomplish goals → business struggles post-funding

The Solution: Detailed cash flow analysis determines:

• Maximum loan amount business can support (DSCR calculation)

• Minimum amount needed to achieve objectives

• Optimal structure (loan amount, term, down payment)

Mistake #4: Not Addressing Credit Issues Upfront

The Problem: Hoping lenders won't notice credit problems or not explaining them adequately.

The Solution: Proactive transparency with written explanations:

• What happened (context for credit issue)

• Why it happened (circumstances)

• How it's been resolved

• Why it won't happen again

Lenders appreciate honesty and context. Many credit issues can be overcome with proper explanation.

Mistake #5: Unrealistic Timeline Expectations

The Problem: Expecting SBA 7(a) loans to close in 2-3 weeks.

The Reality: Plan for 45-60 days (SBA Express up to $500K can close in 30-35 days)

Why it takes time:

• Comprehensive underwriting

• SBA guarantee approval

• Third-party reports (appraisals, environmental assessments)

• Legal documentation

Solution: Start the process early. If you find a business to buy or real estate to purchase, begin loan process immediately.

Mistake #6: Not Shopping Lenders & Rates

The Problem: Accepting the first rate offered without comparison.

The Reality: Rates for identical deals can vary 0.5-1.5% between lenders.

On a $1M loan over 10 years:

• 10.0% vs. 11.0% rate difference

• Costs an extra $62,040 over life of loan

Solution: Professional facilitation automatically shops deals to multiple lenders, ensuring optimal pricing.

Mistake #7: Giving Up After One Decline

The Problem: Getting declined by one bank and assuming you don't qualify for SBA 7(a) loans.

The Reality: A decline from Chase or Wells Fargo doesn't mean you can't get approved—it often just means:

• Wrong lender for your situation

• Application wasn't packaged properly

• Lender was at portfolio capacity

• Lender-specific policy restrictions

Solution: Different lenders have different criteria. Strategic lender selection dramatically improves approval odds.

Michigan Industries We Serve: SBA 7(a) Loan Expertise Across Sectors

LVRG Business Funding has facilitated SBA 7(a) loans for Michigan businesses across virtually every industry. Here are sectors where we have deep expertise:

Manufacturing & Industrial

Michigan's manufacturing sector—automotive suppliers to advanced manufacturing, food processing to metal fabrication—regularly uses SBA 7(a) loans for:

✓ Business acquisitions (buying competitors or suppliers)
✓ Equipment purchases (CNC machines, production lines, robotics, specialized tooling)
✓ Facility expansion and real estate purchases
✓ Working capital for growth and large contracts

Recent example: Sterling Heights metal fabrication company acquired competitor for $1.8M (SBA 7(a) loan), doubled production capacity and revenue, achieved 18-month ROI.

Restaurants, Bars & Food Service

From full-service restaurants to quick-service concepts, breweries to catering operations, Michigan's food service industry relies on SBA 7(a) for:

✓ Restaurant acquisitions (buying existing profitable operations)
✓ Build-outs and renovations
✓ Equipment and commercial kitchen upgrades
✓ Multi-unit expansions

Michigan is one of the top states for restaurant SBA loans. We understand this industry's unique challenges and opportunities.

Recent example: Ann Arbor restaurant group acquired downtown location for $725K (SBA 7(a) loan), profitable within 8 months, business now valued at $1.1M.

Liquor Stores, Gas Stations & Convenience Stores

Metro Detroit's robust retail fuel and beverage market creates exceptional acquisition opportunities. SBA 7(a) loans finance:

✓ Liquor store and party store acquisitions
✓ Gas station and convenience store purchases
✓ Inventory and working capital
✓ Equipment upgrades and facility improvements
✓ Real estate purchases

Recent example: Macomb County party store acquisition for $875K (SBA 7(a) loan), maintained customer base, improved margins through better inventory management, business valued at $1.3M within 2 years.

Automotive Services & Car Washes

Michigan's automotive culture drives demand for service businesses:

✓ Auto repair shop acquisitions
✓ Car wash purchases and equipment upgrades
✓ Quick lube and oil change locations
✓ Specialty automotive services (detailing, body shops, tire centers)

Recent example: Troy car wash acquisition for $1.2M (SBA 7(a) loan), upgraded equipment, increased monthly revenue 35% through membership programs.

Healthcare & Medical Practices

Physicians, dentists, chiropractors, veterinarians, and other healthcare providers throughout Michigan use SBA 7(a) loans for:

✓ Practice acquisitions (buying out retiring practitioners)
✓ Real estate purchases (medical office buildings)
✓ Equipment financing (MRI machines, digital x-ray, surgical equipment, dental chairs)
✓ Practice expansions and multi-location growth

Recent example: Grand Rapids dental practice acquired retiring dentist's patient base and equipment for $950K (SBA 7(a) loan), added $800K annual revenue, owner now building second location.

Construction & Skilled Trades

General contractors, specialty contractors, HVAC companies, plumbing, electrical, and landscaping businesses use SBA 7(a) for:

✓ Equipment purchases (excavators, trucks, specialized tools, vehicles)
✓ Business acquisitions (buying competitors or established client lists)
✓ Working capital for large projects
✓ Real estate (yards, warehouses, shop spaces)

Recent example: Metro Detroit HVAC contractor financed $425K in equipment and trucks (SBA 7(a) loan), increased capacity 40%, secured $2.1M in new commercial contracts.

Transportation & Logistics

Trucking companies, freight brokers, logistics operations, and specialized transportation services use SBA 7(a) for:

✓ Truck and trailer fleet purchases
✓ Terminal and warehouse acquisitions
✓ Business acquisitions (routes, contracts, client relationships)
✓ Working capital and expansion into new territories

Recent example: Lansing trucking company financed $1.2M for equipment and working capital (SBA 7(a) loan), grew fleet from 12 to 20 trucks, revenue increased 65%.

Professional Services

Law firms, accounting practices, engineering firms, marketing agencies, and consulting businesses use SBA 7(a) for:

✓ Practice acquisitions (buying out partners or acquiring firms)
✓ Office space purchases (build equity instead of paying rent)
✓ Working capital for expansion and growth
✓ Technology infrastructure and equipment upgrades

Recent example: Detroit law firm acquired specialty practice for $875K (SBA 7(a) loan), added new practice area, increased annual revenue by $1.2M.

Retail & Specialty Stores

Brick-and-mortar retail, online businesses, franchises, and specialty shops use SBA 7(a) for:

✓ Business acquisitions (buying profitable retail operations)
✓ Real estate purchases (own your retail location)
✓ Inventory financing and seasonal purchasing
✓ Multi-location expansion

Recent example: Grand Rapids specialty retailer purchased building for $650K (SBA 7(a) loan), stopped paying $5,800/month rent, building appreciated $180K in 3 years.

Real Michigan SBA 7(a) Success Stories

Manufacturing Consolidation – Sterling Heights

The Business: 15-year-old precision machining company, $3.2M annual revenue, serving automotive and aerospace clients

The Challenge: Competitor with complementary manufacturing capabilities came up for sale. Owner needed to move quickly but didn't have $2M+ in liquid cash. Conventional lenders wanted 30% down ($700K+).

The LVRG Solution: SBA 7(a) acquisition loan

• Purchase price: $2,350,000

• SBA 7(a) loan: $2,115,000 (90% financing)

• Buyer equity: $235,000 (10%)

• Term: 10 years

• Interest rate: 9.8%

• Monthly payment: $27,200

The Outcome:

• Combined operations under one roof

• Eliminated duplicate overhead

• Cross-selling increased total revenue to $6.1M

• Achieved manufacturing efficiencies reducing per-unit costs 22%

• Expanded customer base by 40%

• Owner paid off loan in 7 years (3 years early)

• Business now valued at $4.8M (104% increase from purchase price)

Owner's perspective: "The SBA 7(a) loan made this possible. We couldn't have tied up $700K in down payment and still had working capital to run both operations. The longer term kept payments manageable while we integrated the businesses."

Restaurant Acquisition – Grand Rapids

The Business: Experienced restaurant manager with 12 years industry experience, ready for ownership

The Challenge: Well-established restaurant for sale in prime downtown Grand Rapids location. $750K purchase price included equipment, inventory, lease assignment, and goodwill. Banks wanted 30% down ($225K) which buyer didn't have. Alternative lenders quoted 18%+ interest rates.

The LVRG Solution: SBA 7(a) acquisition loan

• Purchase price: $750,000

• SBA 7(a) loan: $675,000 (90% financing)

• Buyer equity: $75,000 (10%)

• Term: 10 years

• Interest rate: 10.1%

• Monthly payment: $8,920

The Outcome:

• Buyer acquired profitable operation with established customer base

• Maintained staff continuity (critical for service quality)

• Implemented operational improvements within first 90 days

• Revenue increased 25% in first year through:

  • Extended hours

  • Enhanced menu offerings

  • Improved marketing

• Business now generates $1.1M annual revenue

• Current business valuation: $1.2M (60% increase in equity in 2 years)

Owner's perspective: "I had the experience and industry knowledge, but not the cash for a 30% down payment. The SBA 7(a) loan let me become an owner with just $75K down. Now I'm building real wealth instead of making someone else rich."

Medical Practice Acquisition – Ann Arbor

The Business: Physician acquiring retiring doctor's established practice

The Challenge: $1.2M purchase price included:

• Patient records and established patient base

• Medical equipment and furniture

• Real estate (medical office building)

• Staff and systems

Buyer needed comprehensive financing that conventional lenders couldn't structure.

The LVRG Solution: SBA 7(a) acquisition loan with real estate component

• Purchase price: $1,200,000

• SBA 7(a) loan: $1,080,000 (90% financing)

• Buyer equity: $120,000 (10%)

• Term: 15 years (weighted average for real estate + equipment)

• Interest rate: 9.9%

• Monthly payment: $11,300

The Outcome:

• Acquired established patient base generating $850K annual revenue immediately

• Maintained all existing staff (continuity of care)

• Owns real estate building equity ($3,500/month mortgage vs. $4,800 previous rent)

• Practice generates $950K annual revenue (12% growth in 18 months)

• Real estate has appreciated $140K

• Practice now valued at $1.8M (50% increase)

• Owner planning second location expansion

Owner's perspective: "Buying an established practice instead of starting from scratch saved me 3-5 years of building a patient base. The SBA 7(a) loan made it financially viable—the monthly payment is actually less than what I would have paid in rent plus equipment leases."

Equipment Financing – Metro Detroit Construction

The Business: Growing excavation contractor, $2.5M annual revenue, established reputation in commercial construction

The Challenge: Secured contracts for $3.2M in commercial projects requiring heavy equipment buyer didn't own. Equipment needed: excavators, loaders, dump trucks. Total cost: $600K. Conventional equipment financing offered 4-year terms with payments of $14,000+/month.

The LVRG Solution: SBA 7(a) equipment financing

• Equipment cost: $600,000

• SBA 7(a) loan: $540,000 (90% financing)

• Buyer equity: $60,000 (10%)

• Term: 10 years

• Interest rate: 10.3%

• Monthly payment: $7,140

The Outcome:

• Purchased equipment needed for secured contracts

• 10-year term vs. 4-year conventional = $6,860/month cash flow savings

• Completed $3.2M in contracts in first year

• Revenue increased to $4.1M (64% growth)

• Equipment paid for itself in under 2 years

• Secured additional $2.8M in contracts for following year

• Added 8 employees

Owner's perspective: "The difference between a $14,000 payment and a $7,000 payment was the difference between taking these contracts and passing them up. The longer SBA 7(a) term made the equipment affordable while we were scaling up."

Liquor Store Acquisition – Macomb County

The Business: Buyer acquiring established party store in high-traffic Macomb County location

The Challenge: $875K purchase price for profitable party store generating $180K annual net income. Included inventory, equipment, lease, and goodwill. Buyer had retail experience but limited capital.

The LVRG Solution: SBA 7(a) acquisition loan

• Purchase price: $875,000

• SBA 7(a) loan: $787,500 (90% financing)

• Buyer equity: $87,500 (10%)

• Term: 10 years

• Interest rate: 10.1%

• Monthly payment: $10,400

The Outcome:

• Acquired profitable store with established customer base

• Maintained existing staff and operations

• Implemented inventory management improvements

• Improved margins 18% through better supplier relationships

• Revenue increased from $1.8M to $2.1M

• Business now generates $210K annual net income

• Business valued at $1.3M (49% increase in 24 months)

• Owner refinanced to conventional loan at lower rate after 2 years

Owner's perspective: "I was paying $87,500 to acquire a business that generates $180K+ profit annually. The math was obvious. The SBA 7(a) loan made it possible with only 10% down, and the business generates more than enough cash flow to cover the payment."

Frequently Asked Questions: SBA 7(a) Loans in Michigan

Can I use an SBA 7(a) loan to start a business in Michigan?

Yes, but it's more difficult than financing an existing business.

Startups can qualify for SBA 7(a) loans if:

• ✓ You're buying an SBA-approved franchise (significantly easier path)

• ✓ You have significant industry experience (typically 5+ years in the field)

• ✓ You have a comprehensive business plan with realistic financial projections

• ✓ You're contributing substantial equity (typically 20-30%)

• ✓ You have strong personal credit (typically 700+)

Most SBA 7(a) lenders strongly prefer businesses with:

• 2+ years of tax returns

• Proven revenue and cash flow

• Established customer base

• Track record of profitability

Startup financing is possible, but the bar is higher.

What if I was already declined by a bank for an SBA 7(a) loan?

A decline from one bank doesn't mean you don't qualify.

It often just means:

• ✗ Wrong lender for your specific situation (industry, credit profile, loan size)

• ✗ Application wasn't packaged properly

• ✗ Lender was at portfolio capacity

• ✗ Specific lender policy restrictions

• ✗ Timing issues (lender's fiscal year-end, portfolio concentration limits)

Different lenders have different:

• Credit risk appetites

• Industry preferences

• Loan size sweet spots

• Portfolio availability

• Underwriting philosophies

We've funded hundreds of Michigan businesses declined elsewhere by strategically matching them with the right lenders and properly packaging their applications.

How long does it take to get approved for an SBA 7(a) loan in Michigan?

Typical timeline: 45-60 days from complete application to funding

Breakdown:

• Application and document gathering: 7-14 days

• Pre-underwriting and lender selection: 7-10 days

• Lender underwriting: 10-15 days

• SBA approval: 5-7 days

• Closing and funding: 7-10 days

Complex transactions may take 60-90 days:

• Multiple properties

• Business acquisitions with complicated structures

• Environmental issues

• Legal complications

SBA Express loans (up to $500K) can close in 30-40 days.

Compare to going direct to banks:

• Most business owners spend 75-120 days

• Contact 10-20 lenders before finding approval

• Many give up after multiple declines

Can I get an SBA 7(a) loan with a 650 credit score?

Yes, but it requires strong compensating factors.

Most SBA 7(a) lenders prefer 680+ credit scores, but 650+ is possible with:

✓ Strong cash flow: DSCR of 1.5x or higher
✓ Significant collateral: 100%+ coverage
✓ Larger down payment: 15-20% instead of 10%
✓ Long time in business: 5+ years of profitable operations
✓ Strong business credit: Clean payment history to suppliers/vendors
✓ Clean explanation: For any credit issues

Credit score ranges:

• 680-850: Strong candidate, standard approval process

• 650-679: Good candidate, may need stronger compensating factors

• 620-649: Possible with exceptional business strength

• Below 620: Very difficult without major compensating factors

What's the maximum SBA 7(a) loan amount I can get in Michigan?

Maximum SBA 7(a) loan: $5,000,000

However, your actual maximum depends on:

Business cash flow: Debt service coverage ratio (DSCR) typically needs to be 1.25x or higher

Example:

• Monthly cash flow available for debt: $30,000

• Existing monthly debt payments: $8,000

• Cash available for new loan: $22,000

• At 10% over 10 years: This supports approximately $1.67M loan

• DSCR check: $30,000 ÷ $30,000 = 1.0x ✗ (too tight)

• Need DSCR of 1.25x: Loan should be approximately $1.3M

Collateral available: Lenders prefer 80-100% collateral coverage

Down payment: Larger loans may require larger equity contributions (15-20%)

Business strength: Revenue, profitability, time in business all factor in

Most Michigan businesses we work with: $250,000 to $2,000,000 range

Need more than $5M?

• USDA B&I loans (rural Michigan, up to $25M)

• Conventional commercial loans

• Multiple financing sources combined

Can I refinance my existing SBA 7(a) loan with a new SBA 7(a) loan?

Generally no—you cannot refinance one SBA loan with another SBA loan.

SBA policy restricts refinancing existing government-guaranteed debt with more government-guaranteed debt.

Exceptions:

• ✓ Refinancing SBA disaster loans to regular SBA loans (allowed)

• ✓ Refinancing non-SBA debt with SBA loans (perfectly fine—this is a primary use)

• ✓ Refinancing SBA debt with conventional loans (if you qualify)

If you need to restructure existing SBA debt:

• Talk to your current lender about loan modifications

• Explore workout options with your lender

• Consider bringing in equity investors

• Look into conventional refinancing if your business has strengthened

Do I need an appraisal for an SBA 7(a) loan?

It depends on what you're financing:

Real estate purchases: Yes, full appraisal by licensed appraiser required

• Commercial appraisal of property

• Typically costs $2,500-$7,500 depending on property size/complexity

• Ordered after loan approval, before closing

Business acquisitions: Often yes, business valuation required

• For acquisitions typically over $250,000

• Can be done by business valuation professionals, CPAs with valuation credentials, or industry-specific experts

• Cost: $3,000-$10,000+ depending on business complexity

Equipment purchases: Typically no

• Unless you're financing very specialized or custom equipment

• Equipment invoices/quotes usually sufficient

Working capital: No appraisal needed

Can I use an SBA 7(a) loan for a business outside Michigan?

Yes, SBA 7(a) loans can be used anywhere in the United States.

If you're a Michigan business owner:

• Expanding into another state

• Purchasing an out-of-state operation

• Acquiring a business with multi-state locations

SBA 7(a) financing works.

However: Our deepest expertise and strongest lender relationships are for Michigan-based businesses and Michigan projects. We understand:

• Michigan's economic landscape

• Key industries and market dynamics

• Local lender preferences

• Regional business challenges and opportunities

What happens if I want to sell my business before the SBA 7(a) loan is paid off?

The loan must be paid off at closing from sale proceeds.

This is standard for all business sales with existing debt.

Process:

1. Business is listed for sale

2. Buyer is found, purchase agreement signed

3. Buyer secures financing (often their own SBA 7(a) loan)

4. At closing:

   • Buyer's funds pay off your existing SBA loan

   • You receive remaining sale proceeds

5. Transaction closes

Prepayment penalties:

• Most SBA 7(a) loans: Minimal or no prepayment penalties

• Especially after first 2-3 years

• Some lenders charge small fee (0.5-1%) in early years

• Check your specific loan documents

Example:

• Original loan: $1,000,000

• Current balance: $750,000

• Sale price: $1,500,000

• Payoff of loan: $750,000

• Your proceeds: $750,000 (minus transaction costs)

Can I use an SBA 7(a) loan to buy out a business partner?

Yes, partner buyouts are an approved use of SBA 7(a) proceeds.

This is common when:

• One partner wants to exit the business

• Partners have disagreements about business direction

• Partner is retiring

• Partner has other opportunities

How it works:

The loan finances the purchase of the departing partner's ownership stake.

Requirements:

• Business must qualify (revenue, cash flow, credit)

• Departing partner agrees to sale terms

• Business valuation establishes fair market value

• Remaining partner(s) demonstrate ability to run business

• Lender comfortable with post-buyout ownership structure

Example: 50/50 partnership, one partner wants out

• Business valued at: $2,000,000

• Departing partner's 50% share: $1,000,000

• SBA 7(a) loan: $900,000 (90%)

• Remaining partner equity: $100,000 (10%)

• Remaining partner now owns 100% of business

Advantages of SBA 7(a) for partner buyouts:

• Longer terms (10-25 years) = affordable payments

• Preserves business cash flow

• Partner leaving gets full value

• Remaining partner gains 100% ownership

• Business operations continue uninterrupted

Ready to Secure SBA 7(a) Financing for Your Michigan Business?

You've built a real business. You're generating real revenue. You have a clear vision for growth—whether that's acquiring a competitor, purchasing your building, upgrading equipment, or expanding operations.

Now you need capital to execute.

Don't waste months calling banks that will decline you or take 120 days to say "maybe."

Work with Michigan's SBA 7(a) Specialists

LVRG Business Funding has facilitated over $1 billion in business financing for 10,000+ companies, with deep expertise in the Michigan market—from Metro Detroit to Grand Rapids, Ann Arbor to the Upper Peninsula.

We specialize in SBA 7(a) loans for:

• Manufacturing and industrial businesses

• Restaurants, bars, and food service

• Liquor stores, gas stations, and convenience stores

• Automotive services and car washes

• Healthcare and medical practices

• Construction and skilled trades

• Professional services

• Retail and e-commerce

Three Ways to Get Started

1. Call Our Michigan Team 📞 (855) 998-5874

Speak directly with an SBA loan specialist who understands Michigan businesses. Available Monday-Friday, 9am-6pm EST.

2. Email Your Situation ✉️ hello@lvrgllc.com

Tell us about your business and financing needs. We respond within 24 hours with preliminary feedback and next steps.

3. Complete Our Quick Form

We'll contact you within 24 hours with a preliminary assessment and next steps.

What Happens Next

Within 24 hours:

• ✓ Know whether you qualify for SBA 7(a) financing

• ✓ Estimated loan amount based on your financials

• ✓ Preliminary rate and term expectations

• ✓ Timeline to funding

• ✓ Documentation requirements

Within 7-10 days:

• ✓ Complete loan package prepared and packaged

• ✓ Multiple lender options to choose from

• ✓ Clear path to approval

Within 45-60 days:

• ✓ Funded and ready to execute your growth plans

About LVRG Business Funding

LVRG Business Funding is Michigan's trusted partner for SBA 7(a) loans and comprehensive business financing. Based in Metro Detroit with deep roots throughout Michigan, we've spent over 20 years helping Michigan businesses access the capital they need to acquire competitors, purchase real estate, finance equipment, and fuel growth.

Our Approach:

• No cost to you: Lenders compensate us—you get expert guidance at zero cost while often securing better rates than going direct

• 25+ lender network: Strategic access to the nation's most capable SBA lenders

• Michigan expertise: Deep understanding of Michigan's economy, industries, and business landscape

• Proven results: $1 billion+ facilitated in business financing for 10,000+ companies nationwide

Our Specialization:

• Business acquisitions (manufacturing, restaurants, retail, professional services)

• Commercial real estate (owner-occupied properties statewide)

• Equipment financing (construction, manufacturing, healthcare)

• Working capital and expansion financing

• Industry-specific expertise (liquor stores, gas stations, car washes, automotive services)

Cities We Serve: Detroit, Sterling Heights, Warren, Troy, Livonia, Dearborn, Westland, Farmington Hills, Southfield, Royal Oak, Grand Rapids, Ann Arbor, Lansing, Kalamazoo, Flint, and throughout Michigan's 83 counties.

Ready to move forward? Contact LVRG Business Funding today.

📞 (855) 998-5874 | ✉️ info@lvrgllc.com

This guide is for informational purposes only and does not constitute financial advice. Loan terms, rates, and requirements are subject to change and depend on individual borrower qualifications and lender criteria. LVRG Business Funding is not a lender but works with a network of SBA-approved lenders to facilitate business financing.

Michigan Business Loans: The Complete Guide to Business Financing for Established Michigan Companies

Business Loans Michigan | Business Financing Michigan | SBA Loans | Working Capital | Equipment Financing | Commercial Real Estate Loans

If you're running an established business in Michigan and need capital to grow, expand, purchase equipment, acquire real estate, or seize opportunities—you already know that finding the right financing partner is harder than it should be. Banks move slowly. Online lenders charge rates that don't make sense. Government programs require months of paperwork. And by the time you get an answer, the opportunity has passed.

LVRG Business Funding is Michigan's business loan authority. We're a Detroit-based direct lender with institutional banking partnerships that give us unlimited funding capacity from $50,000 to $50 million. Over 20 years, we've deployed more than $1 billion in financing to over 10,000 established businesses across Michigan and nationwide. We provide working capital loans, SBA 7(a) and 504 loans, equipment financing, commercial real estate loans, business acquisition financing, and revenue-based financing to Michigan companies ready to capitalize on growth opportunities.

This is the most comprehensive guide to Michigan business loans available. Whether you're a manufacturer in Detroit, a construction company in Grand Rapids, a restaurant in Ann Arbor, a gas station owner in Lansing, or any established Michigan business seeking financing—this guide covers everything you need to know about business loans in Michigan, how to qualify, what lenders offer the best terms, and why Michigan business owners choose LVRG.

Michigan Business Loans: Understanding Your Financing Options

Michigan business owners have access to multiple types of business financing, each designed for specific needs and situations. Understanding which type of Michigan business loan fits your situation is the first step toward securing the capital your business needs.

Working Capital Loans Michigan

Working capital loans provide Michigan businesses with short-term financing for operational needs, inventory purchases, payroll, seasonal gaps, and immediate growth opportunities. Working capital financing Michigan typically ranges from $25,000 to $1.5 million and can fund within 24-48 hours for qualified businesses.

Who needs working capital loans in Michigan:

• Construction companies bridging the gap between project expenses and payment

• Manufacturers purchasing raw materials for large orders

• Restaurants stocking inventory for peak seasons

• Retail businesses (gas stations, liquor stores) buying seasonal inventory

• Service businesses managing cash flow gaps

LVRG provides working capital loans Michigan with:

• $25,000 to $1.5 million loan amounts

• 24-48 hour funding from approval

• Revenue-based repayment structures that align with cash flow

• Minimal documentation (typically just bank statements)

• Focus on business performance, not just credit scores

Michigan working capital loans from LVRG help established businesses maintain momentum, seize opportunities, and smooth cash flow without the lengthy approval processes traditional banks require.

SBA Loans Michigan: 7(a) and 504 Financing

SBA loans are government-backed financing solutions that offer Michigan businesses longer terms, lower rates, and better overall economics than conventional business loans. The Small Business Administration guarantees a portion of the loan, which allows lenders to provide more favorable terms to qualified Michigan businesses.

SBA 7(a) Loans Michigan: SBA 7(a) loans are the most versatile SBA financing option, providing up to $5 million for working capital, equipment purchases, commercial real estate, business acquisitions, partner buyouts, and debt refinancing. Michigan SBA 7(a) loans typically offer:

• Loan amounts: $500,000 to $5 million

• Terms: Up to 10 years for equipment/working capital, up to 25 years for real estate

• Rates: Currently 10.5-15.5% depending on loan size and term

• Down payment: Typically 10-20% depending on use of funds

SBA 504 Loans Michigan: SBA 504 loans focus specifically on commercial real estate and equipment purchases for Michigan businesses. These loans offer:

• Loan amounts: $500,000 to $15 million

• Terms: Fixed rates for 10, 20, or 25 years

• Down payment: As low as 10% for qualified owner-occupied properties

• Use: Purchasing commercial real estate, constructing facilities, buying heavy equipment

Who benefits from Michigan SBA loans:

• Manufacturers purchasing facilities or expensive equipment

• Construction companies buying shop buildings or equipment yards

• Gas station owners purchasing their properties

• Restaurant owners buying their locations

• Medical and dental practices acquiring buildings or equipment

• Business owners acquiring existing businesses

LVRG specializes in Michigan SBA loans and completes SBA 7(a) and 504 financing in 30-45 days—significantly faster than the typical 60-90+ day timeline most banks require. Our experience packaging SBA applications and working with SBA underwriters means Michigan businesses get approved faster with better terms.

Equipment Financing Michigan

Equipment financing and equipment leasing Michigan allows businesses to purchase or lease equipment without depleting working capital. Equipment loans Michigan range from $100,000 to over $50 million depending on the equipment type and business need.

Types of equipment LVRG finances for Michigan businesses:

Construction Equipment Michigan:

• Excavators, bulldozers, backhoes, loaders

• Dump trucks, commercial trucks, trailers

• Concrete mixers, pavers, compactors

• Cranes, scaffolding, lifts

• Asphalt equipment, grading equipment

Manufacturing Equipment Michigan:

• CNC machines, lathes, mills

• Fabrication equipment, welding systems

• Production lines, assembly equipment

• Robotics, automation systems

• Quality control and testing equipment

• Packaging and material handling equipment

Medical Equipment Financing Michigan:

• MRI machines, CT scanners, X-ray equipment

• Dental chairs and dental equipment

• Surgical equipment and tools

• Laboratory equipment

• Medical office furniture and systems

Restaurant Equipment Financing Michigan:

• Commercial kitchens, ovens, ranges

• Refrigeration and freezer systems

• Food preparation equipment

• Dining furniture and fixtures

• Point-of-sale systems

Agriculture Equipment Financing Michigan:

• Tractors, combines, harvesters

• Irrigation systems

• Storage and processing equipment

• Farm machinery and implements

LVRG equipment financing Michigan offers:

• $100,000 to $50 million+ in funding capacity

• Both equipment loans (ownership) and leases (flexibility)

• Terms from 2-7 years depending on equipment type

• Financing for new and used equipment

• Fast approvals (5-10 days typical)

Michigan equipment financing from LVRG preserves working capital while providing the machinery, vehicles, and tools Michigan businesses need to operate and grow.

Commercial Real Estate Loans Michigan

Commercial real estate financing Michigan allows business owners to purchase the properties where they operate rather than paying rent to landlords. Owner-occupied commercial real estate loans Michigan provide long-term financing with favorable terms for established businesses.

Types of commercial properties LVRG finances in Michigan:

Manufacturing Facilities Michigan:

• Production facilities, fabrication shops

• Warehouses and distribution centers

• Industrial buildings and flex space

• Tool and die shops, machine shops

Office Buildings Michigan:

• Professional office spaces

• Medical and dental offices

• Corporate headquarters

• Multi-tenant office buildings (owner-occupied majority)

Retail Properties Michigan:

• Gas stations with convenience stores

• Liquor stores and retail shops

• Standalone retail buildings

• Strip centers (owner-occupied majority)

Restaurant Properties Michigan:

• Restaurant buildings

• Fast-casual and quick-service locations

• Mixed-use properties with restaurants

Shop Facilities for Construction Companies:

• Equipment yards and storage facilities

• Shop buildings for contractors

• Warehouses for construction materials

• Office/warehouse combination buildings

LVRG commercial real estate financing Michigan includes:

• $500,000 to $15 million loan amounts

• SBA 504 loans (10% down, long-term fixed rates)

• Conventional commercial mortgages (20-25% down)

• Terms up to 25 years

• Competitive rates for owner-occupied properties

Michigan commercial real estate loans from LVRG help established businesses stop paying rent and start building equity in the properties where they operate.

Business Acquisition Loans Michigan

Business acquisition financing Michigan allows entrepreneurs to purchase existing businesses, buy out partners, or acquire competitors. Acquisition loans Michigan typically use SBA 7(a) financing, which offers favorable terms for business ownership transitions.

LVRG finances business acquisitions Michigan for:

• Buying existing businesses (full ownership purchase)

• Partner buyouts (buying out co-owners)

• Management buyouts (key employees purchasing the company)

• Competitor acquisitions (consolidating market share)

• Franchise purchases

Michigan business acquisition loans include:

• $500,000 to $15 million financing capacity

• SBA 7(a) loans with 10-20% down payment

• Terms up to 10 years (25 years if real estate included)

• Evaluation of both buyer qualifications and target business performance

• Support throughout due diligence and closing process

Business acquisition financing Michigan from LVRG helps entrepreneurs become business owners, helps existing owners expand through acquisitions, and facilitates ownership transitions for retiring business owners.

Cash Flow Loans Michigan | Revenue-Based Financing Michigan

Cash flow loans Michigan and revenue-based financing Michigan provide capital based on business revenue and performance rather than credit scores or collateral. This type of Michigan business financing works particularly well for businesses with strong revenue but perhaps imperfect credit or limited collateral.

Revenue-based financing Michigan offers:

• $25,000 to $1.5 million in funding

• Approval based on revenue consistency, not credit scores

• Repayment as percentage of daily or weekly revenue

• Flexible repayment that increases during strong months, decreases during slow periods

• Fast funding (24-48 hours typical)

Who benefits from cash flow loans Michigan:

• Restaurants with strong sales but seasonal patterns

• Retail businesses (gas stations, liquor stores) with consistent revenue

• Service businesses with solid cash flow

• Companies experiencing rapid growth

• Businesses recovering from credit challenges

Cash flow loans Michigan from LVRG provide fast, flexible financing for established Michigan businesses that need capital without traditional bank requirements.

Michigan Cities We Serve: Business Loans Throughout the State

LVRG provides business financing to established companies across all of Michigan. While we're headquartered in downtown Detroit, our reach extends throughout Metro Detroit, West Michigan, Northern Michigan, and every region of the state.

Detroit Business Loans

Detroit business loans from LVRG serve Michigan's largest city and economic hub. Detroit business financing includes working capital for restaurants and retail businesses in revitalized downtown neighborhoods, equipment financing for automotive suppliers, manufacturing loans for tool and die shops and fabrication companies, commercial real estate financing for businesses purchasing properties in Detroit's growing business districts, and acquisition financing for Detroit entrepreneurs buying existing businesses.

Detroit Michigan business loans from LVRG support the city's economic resurgence by providing capital to established businesses driving Detroit's growth.

Grand Rapids Business Loans

Grand Rapids business loans and West Michigan business financing from LVRG serve one of Michigan's fastest-growing business regions. Grand Rapids business financing includes manufacturing loans for production companies, construction financing for contractors building West Michigan's commercial projects, restaurant and retail financing for Grand Rapids' thriving business districts, equipment financing for medical practices and healthcare businesses, and commercial real estate loans for businesses purchasing properties in Grand Rapids, Holland, Kalamazoo, and surrounding communities.

Grand Rapids Michigan business loans from LVRG fuel West Michigan's economic momentum with fast, flexible capital solutions.

Ann Arbor Business Loans

Ann Arbor business loans from LVRG serve one of Michigan's most educated and innovative business markets. Ann Arbor business financing includes working capital for technology companies and startups transitioning to established businesses, equipment financing for medical and dental practices, commercial real estate financing for professional service firms, restaurant financing for Ann Arbor's diverse dining scene, and acquisition financing for businesses buying competitors or expanding operations.

Ann Arbor Michigan business loans from LVRG support the city's entrepreneurial ecosystem with comprehensive financing solutions.

Additional Michigan Cities We Serve:

Southeast Michigan Business Loans:

• Warren business loans

• Sterling Heights business loans

• Dearborn business loans

• Livonia business loans

• Troy business loans

• Farmington Hills business loans

• Novi business loans

• Southfield business loans

• Rochester Hills business loans

• Royal Oak business loans

• Pontiac business loans

• Westland business loans

• Taylor business loans

Mid-Michigan Business Loans:

• Lansing business loans (Michigan's capital city)

• Flint business loans

• Saginaw business loans

• Midland business loans

• Bay City business loans

• Jackson business loans

• Battle Creek business loans

West Michigan Business Loans:

• Grand Rapids business loans

• Kalamazoo business loans

• Holland business loans

• Muskegon business loans

• Wyoming business loans

Northern Michigan Business Loans:

• Traverse City business loans

• Petoskey business loans

• Gaylord business loans

• Cadillac business loans

• Alpena business loans

Upper Peninsula Business Loans:

• Marquette business loans

• Sault Ste. Marie business loans

• Escanaba business loans

LVRG has funded businesses in over 90% of Michigan counties. Regardless of where your Michigan business operates, LVRG has the capacity and commitment to provide business financing solutions.

Industries We Finance: Michigan Business Loans by Sector

LVRG provides Michigan business loans to established companies across virtually every industry. Our deep experience funding Michigan businesses means we understand industry-specific challenges, cash flow patterns, and capital needs.

Manufacturing Loans Michigan

Manufacturing financing Michigan is a core focus for LVRG. Michigan's manufacturing sector—from automotive suppliers to tool and die shops to plastics manufacturers—represents the backbone of the state's economy. Made in Michigan businesses need capital for equipment, facilities, working capital, and growth.

Michigan manufacturing businesses we finance:

Automotive Supply Chain:

• Tier 1, 2, and 3 automotive suppliers

• Stamping and metal forming companies

• Parts manufacturing and assembly

• Automotive tooling and fixtures

Tool and Die Manufacturing Michigan:

• Tool and die shops

• Precision machining companies

• Mold making and die casting

• CNC machining operations

Metal Fabrication Michigan:

• Steel fabrication shops

• Aluminum fabrication

• Custom metal manufacturing

• Welding and assembly operations

Plastics Manufacturing Michigan:

• Injection molding companies

• Plastic extrusion manufacturers

• Thermoforming operations

• Custom plastics production

Other Manufacturing:

• Food and beverage manufacturing

• Packaging manufacturing

• Industrial equipment manufacturing

• Consumer goods production

Manufacturing financing Michigan from LVRG includes:

• Equipment financing for CNC machines, production equipment, robotics

• Working capital for raw materials and production costs

• Commercial real estate for purchasing manufacturing facilities

• SBA loans for long-term growth capital

• Business acquisition loans for consolidating operations

Michigan manufacturing loans from LVRG provide the capital Michigan manufacturers need to invest in equipment, expand facilities, and compete globally while maintaining the "Made in Michigan" legacy.

Construction Loans Michigan

Construction financing Michigan serves contractors, skilled trades businesses, and construction companies throughout the state. Michigan construction companies face unique challenges including seasonal revenue, project-based cash flow, equipment intensity, and bonding requirements.

Michigan construction businesses we finance:

General Contractors Michigan:

• Commercial construction companies

• Residential construction contractors

• Design-build firms

• Construction management companies

Specialty Contractors:

• Electrical contractors

• Plumbing contractors

• HVAC contractors

• Roofing contractors

• Concrete contractors

• Asphalt and paving companies

• Excavating and site work contractors

• Framing contractors

• Drywall contractors

• Painting contractors

• Flooring contractors

Heavy Construction:

• Road construction companies

• Bridge construction

• Infrastructure contractors

• Utilities contractors

Other Construction Trades:

• Landscaping companies

• Snow removal contractors

• Fencing and deck builders

• Masonry contractors

Construction financing Michigan from LVRG includes:

• Equipment financing for heavy equipment, trucks, tools

• Working capital for project startup costs, materials, labor

• Commercial real estate for shop facilities and equipment yards

• SBA loans for long-term growth capital

• Lines of credit for ongoing project needs

Michigan construction loans from LVRG account for seasonal cash flow patterns, project-based revenue, and the unique challenges Michigan contractors face operating in a climate with distinct seasons.

Restaurant Loans Michigan

Restaurant financing Michigan serves established restaurants, fast-casual concepts, quick-service restaurants, bars, breweries, and food service businesses across Michigan. Restaurant loans Michigan provide capital for equipment, build-outs, working capital, real estate purchases, and expansion.

Michigan restaurant businesses we finance:

• Independent restaurants (full-service dining)

• Fast-casual restaurants

• Quick-service restaurants

• Pizza shops and pizzerias

• Coney Island restaurants (Michigan staple)

• Bars and taverns

• Craft breweries and brewpubs

• Coffee shops and cafes

• Catering companies

• Food trucks transitioning to brick-and-mortar

Restaurant financing Michigan from LVRG includes:

• Working capital for inventory, payroll, seasonal gaps

• Equipment financing for commercial kitchens, ovens, refrigeration

• SBA loans for restaurant build-outs and expansions

• Commercial real estate for purchasing restaurant properties

• Franchise financing for multi-unit restaurant operators

Michigan restaurant loans from LVRG understand restaurant cash flow, seasonal patterns, and the capital intensity of food service operations.

Retail Loans Michigan: Gas Stations, Liquor Stores, Convenience Stores

Retail business loans Michigan serve gas stations, liquor stores, convenience stores, and other retail operations throughout Michigan. These cash-flow-intensive businesses need financing for inventory, equipment, property purchases, and acquisitions.

Michigan retail businesses we finance:

Gas Stations Michigan:

• Gas stations with convenience stores

• Standalone fuel stations

• Gas station franchises (Marathon, Shell, BP, etc.)

• Truck stops

Liquor Stores Michigan:

• Package liquor stores

• Wine and spirits shops

• Beer, wine, and liquor retail

• Specialty alcohol retailers

Convenience Stores Michigan:

• Independent convenience stores

• Chain convenience stores

• Party stores (Michigan term for convenience stores with alcohol)

Other Retail Michigan:

• Grocery stores and markets

• Specialty food retailers

• Auto parts stores

• Hardware stores

• Smoke shops and tobacco retailers

Retail financing Michigan from LVRG includes:

• Working capital for inventory purchases and seasonal stock-up

• Equipment financing for coolers, fuel pumps, POS systems

• Commercial real estate for purchasing retail properties

• Business acquisition loans for buying existing retail businesses

• SBA loans for retail expansion and growth

Michigan retail loans from LVRG serve established retail businesses with consistent cash flow and growth opportunities throughout the state.

Medical and Dental Practice Loans Michigan

Medical practice loans Michigan and dental practice loans Michigan provide financing for healthcare professionals and practices across the state. Medical financing Michigan includes equipment purchases, practice acquisitions, real estate purchases, and working capital.

Michigan medical and dental practices we finance:

• Dental practices and dentist offices

• Medical practices (primary care, specialists)

• Veterinary clinics and animal hospitals

• Chiropractic offices

• Physical therapy practices

• Urgent care centers

• Medical spas and aesthetic practices

• Optometry and vision centers

Medical and dental financing Michigan from LVRG includes:

• Equipment financing for diagnostic equipment, dental chairs, imaging systems

• Practice acquisition loans for buying out partners or acquiring practices

• Commercial real estate for purchasing medical office buildings

• Working capital for practice operations and expansion

• SBA loans for practice growth and development

Michigan medical practice loans from LVRG help healthcare professionals invest in their practices, expand operations, and provide quality care throughout Michigan communities.

Additional Industries We Finance in Michigan:

• Professional Services: Accounting firms, law firms, engineering companies, consulting businesses

• Transportation and Logistics: Trucking companies, logistics providers, freight companies

• Agriculture: Farms, agricultural operations, food processing

• Automotive Services: Auto repair shops, car washes, auto dealerships

• Hospitality: Hotels, motels, bed and breakfasts

• Franchises: Multi-unit franchise operators across all sectors

• Technology Companies: Established tech businesses with consistent revenue

• Distribution: Wholesale distributors, supply companies

• Printing and Graphics: Commercial printers, sign companies

• Industrial Services: Maintenance companies, industrial cleaning, equipment repair

LVRG provides Michigan business loans to established companies across all industries. If you're operating a profitable Michigan business with consistent revenue, LVRG has financing solutions that fit your needs.

How to Qualify for Business Loans in Michigan

Qualifying for Michigan business loans depends on several factors including the type of financing, loan amount, and your business's financial profile. Understanding qualification requirements helps Michigan business owners prepare applications and improve approval odds.

General Qualification Requirements for Michigan Business Loans:

Business Revenue:

• Minimum $50,000+ per month in consistent revenue

• At least 6-12 months of operating history (2+ years preferred for SBA loans)

• Demonstrated revenue consistency and growth trajectory

Credit Requirements:

• Personal credit score 600+ for working capital and revenue-based financing

• Personal credit score 650+ for SBA loans and commercial real estate financing

• Business credit profile considered but not always required

Business Structure:

• For-profit business entity (LLC, corporation, partnership, sole proprietorship)

• At least 51% U.S. citizen or legal permanent resident ownership

• Operating in Michigan or nationwide

Financial Health:

• Positive or break-even cash flow (demonstrated ability to service debt)

• Reasonable existing debt load (debt service coverage ratio 1.25+ preferred)

• No recent bankruptcies, foreclosures, or major credit events (some exceptions)

Documentation Requirements:

• Business bank statements (3-6 months for working capital, 12+ months for larger loans)

• Business tax returns (1-3 years depending on loan type)

• Personal tax returns for owners (for SBA and larger loans)

• Financial statements (profit & loss, balance sheet)

• Business formation documents

• Use of funds explanation

Specific Requirements by Loan Type:

Working Capital Loans Michigan:

• Minimum $50,000+ monthly revenue

• 6+ months operating history

• 3-6 months business bank statements

• Credit score 600+

• Focus on revenue consistency and bank account activity

SBA Loans Michigan:

• 2+ years operating history

• Strong cash flow and profitability

• Credit score 650+

• 3 years tax returns (business and personal)

• Detailed use of funds and business plan

• Collateral (often personal guarantee and business assets)

Equipment Financing Michigan:

• Quote or invoice for equipment being purchased

• Demonstration of business need for equipment

• Credit score 600-650+ depending on amount

• Equipment serves as primary collateral

Commercial Real Estate Michigan:

• 2+ years operating history

• Owner-occupancy of 51%+ of property

• Strong business financials

• Credit score 650+

• Down payment 10-30% depending on financing type (SBA vs conventional)

Business Acquisition Loans Michigan:

• Target business financials (3 years tax returns)

• Buyer's industry experience and qualifications

• Purchase agreement or letter of intent

• Credit score 650+

• Down payment typically 10-20%

What Disqualifies Michigan Businesses from Financing:

While LVRG works with many businesses that traditional banks decline, some situations make financing difficult or impossible:

• Startups with no revenue history (we fund established businesses)

• Businesses with negative cash flow unable to service debt

• Recent bankruptcies (within 2-3 years typically)

• Active tax liens or judgments (must be resolved)

• Excessive existing debt relative to cash flow

• Illegal or restricted business activities

• Businesses primarily engaged in passive income (investment real estate, etc.)

How LVRG Evaluates Michigan Business Loan Applications:

Unlike banks that rely primarily on credit scores and rigid underwriting boxes, LVRG evaluates Michigan businesses holistically:

We consider:

• Revenue consistency and growth trends

• Industry dynamics and business model strength

• Management experience and operational track record

• Use of funds and expected return on capital investment

• Collateral and assets (when applicable)

• Overall business health and trajectory

We understand:

• Seasonal businesses have cyclical revenue (landscaping, construction)

• Project-based businesses have lumpy cash flow (contractors, manufacturers)

• Some industries are capital-intensive and require different evaluation

• Credit scores don't tell the whole story of business quality

This holistic evaluation approach means LVRG approves many Michigan businesses that banks decline—not because we accept higher risk, but because we understand business operations better than generic bank underwriters.

Why Michigan Business Owners Choose LVRG Business Funding

Michigan has many business lenders: local banks, credit unions, national banks, online lenders, alternative finance companies, and government programs. So why do established Michigan businesses choose LVRG?

Direct Lender + Institutional Banking Partnerships = Unlimited Capacity

LVRG is structured differently than most lenders. We're a direct lender with our own capital, and we have strategic partnerships with institutional banks. This dual structure gives us:

Unlimited funding capacity: We can deploy $50,000 or $50 million depending on the need. Most direct lenders are limited by their balance sheet. Brokers don't have any capital—they just shop deals. LVRG has both internal capacity and external partnerships, giving Michigan businesses access to capital at any scale.

Flexibility in deal structure: Because we can lend directly or facilitate through partners, we structure deals based on what makes sense for the business, not based on our internal constraints.

Best available pricing: Our banking relationships and deal volume give us access to premier pricing that business owners wouldn't get on their own. We leverage our institutional relationships to secure better rates and terms than if the business approached those banks directly.

Speed: Capital at the Speed of Opportunity

Timing matters in business. Equipment becomes available at auction pricing. Projects require immediate mobilization. Acquisition opportunities don't wait for 90-day bank approvals.

LVRG funding timelines:

• Working capital and revenue-based financing: 24-48 hours

• Equipment financing: 5-10 days

• SBA loans: 30-45 days (versus 60-90+ days typical)

• Commercial real estate: 30-60 days depending on complexity

This speed advantage isn't about cutting corners—it's about efficient processes, experienced underwriting, and direct decision-making authority. When Michigan businesses need capital quickly, LVRG delivers.

Business Owner Advocacy: We Work FOR You

Here's what most Michigan business owners don't understand about the lending industry: brokers get paid whether you get a good deal or bad deal. Banks have no incentive to fight for better terms. Online lenders take-it-or-leave-it pricing.

LVRG is different.

When we facilitate deals through banking partners, we act as your advocate:

• We package applications to present your business in the strongest light

• We communicate with underwriters to address questions and concerns

• We negotiate terms, rates, and fees on your behalf

• We manage the process from application to funding

• We're incentivized the same way you are—we don't get paid unless you get funded

This advocacy model means Michigan business owners get better deals, smoother processes, and a partner working in their interest rather than just processing paperwork.

No Upfront Fees to Business Owners

LVRG's fee structure aligns our interests with yours:

For deals we fund directly: Our fees are built into the financing terms (disclosed transparently upfront)

For deals we facilitate through banking partners: We're paid on the backend by the lending institution, not by you

This means Michigan business owners don't pay thousands in upfront fees to "apply" or "get considered." We get paid when you get funded—period.

Relational, Not Transactional

Banks view lending as transactions. They process applications, approve or decline, and move on. You're a file number, not a relationship.

LVRG builds long-term partnerships with Michigan business owners.

A manufacturing company might start with equipment financing, later add working capital, eventually purchase their facility, and then finance additional equipment as they grow. That's not four separate transactions—it's one evolving relationship where we understand your business deeply and provide capital solutions as needs change.

Many LVRG clients have been with us for 5, 10, even 15+ years across multiple financing needs. That relationship depth means:

• Faster approvals (we already know your business)

• Better terms (we know your track record)

• Strategic advice (we understand your industry and market)

• Reliability (you know we deliver what we promise)

Detroit-Based, Michigan-Focused, Nationwide Capabilities

LVRG is headquartered in downtown Detroit's historic Ford Building. Our team lives and works in Michigan. We understand:

• Michigan's automotive supply chain and manufacturing ecosystem

• Seasonal business cycles in construction and trades

• Regional economic variations (Metro Detroit vs West Michigan vs Northern Michigan)

• "Made in Michigan" pride and the state's industrial legacy

• Michigan business culture and values

This local knowledge matters. When a tool and die shop in Warren is investing in CNC equipment to serve the EV supply chain, we understand the context. When a Grand Rapids construction company is navigating West Michigan's commercial building boom, we get it.

National lenders and online platforms apply generic underwriting to Michigan-specific businesses. LVRG understands Michigan business because we're part of the community.

While our focus is Michigan, LVRG has nationwide lending capabilities and has funded businesses in all 50 states. Michigan businesses get priority and localized service, but we can serve established businesses anywhere.

20+ Years, $1 Billion+, 10,000+ Businesses

LVRG's track record speaks for itself:

• Founded in 2000 (20+ years in business)

• Over $1 billion deployed in financing

• More than 10,000 businesses funded

• Thousands of repeat clients

• Reputation earned through consistent delivery

This longevity and volume means:

• We've seen every type of business situation

• We understand what works and what doesn't

• We have established relationships that benefit our clients

• We're not a fly-by-night lender that will disappear

• We've funded businesses through multiple economic cycles

Comprehensive Financing Solutions: One Relationship for All Needs

Most lenders specialize in one product. If your need doesn't fit their box, you're back to searching.

LVRG provides Michigan businesses with comprehensive financing:

• Working capital and growth financing ($25K-$1.5M)

• SBA 7(a) and 504 loans ($500K-$15M)

• Equipment financing ($100K-$50M+)

• Commercial real estate ($500K-$15M)

• Business acquisitions ($500K-$15M)

• Cash flow and revenue-based financing ($25K-$1.5M)

• Lines of credit and revolving facilities

One relationship scales with your business from $50,000 working capital loans to $15 million facility purchases—and everything in between.

Transparency and Integrity

LVRG operates with complete transparency:

• Clear, upfront disclosure of rates, terms, and fees

• No hidden costs or surprise charges

• Honest assessment of approval odds before you invest time

• Ethical lending practices that prioritize client success

• Reputation built on integrity, not aggressive sales tactics

Our reputation wasn't bought with advertising—it was earned by doing what we said we'd do, deal after deal, year after year. Michigan business owners trust LVRG because we've consistently delivered results with integrity and professionalism for over two decades.

Frequently Asked Questions: Michigan Business Loans

What is the best type of business loan for Michigan companies?

The best business loan depends on your specific need. Working capital loans work best for short-term operational needs and immediate opportunities (24-48 hour funding). SBA loans work best for long-term capital investments in equipment, real estate, or acquisitions (better rates, longer terms). Equipment financing works best when purchasing specific machinery or vehicles. Commercial real estate loans work best when buying your facility. LVRG helps Michigan businesses determine which financing type makes the most sense based on need, timing, and business situation.

How fast can I get a business loan in Michigan?

Funding speed depends on loan type. Working capital and revenue-based financing from LVRG typically funds in 24-48 hours. Equipment financing closes in 5-10 days. SBA loans take 30-45 days through LVRG (faster than typical 60-90 days). Commercial real estate financing takes 30-60 days depending on property complexity. Traditional banks often take 60-90+ days for any substantial loan.

What credit score do I need for a Michigan business loan?

Credit requirements vary by loan type. Working capital and revenue-based financing typically requires 600+ credit score. SBA loans and commercial real estate financing typically requires 650+ credit score. Equipment financing typically requires 600-650+ depending on amount. LVRG evaluates businesses holistically—credit score is one factor, but consistent revenue, business performance, and cash flow matter more than perfect credit.

Do I need collateral for Michigan business loans?

Collateral requirements depend on loan type. Working capital and revenue-based financing typically doesn't require specific collateral (may include general business asset lien). Equipment financing uses the equipment as collateral. Commercial real estate uses the property as collateral. SBA loans typically require collateral but may use business assets, real estate, or personal guarantees. LVRG structures collateral requirements based on loan type and business situation.

Can startups get business loans in Michigan?

LVRG specializes in financing established businesses rather than startups. We typically require at least 6-12 months of operating history with consistent revenue of $50,000+ per month. Startups need different capital sources (venture capital, angel investors, startup-specific programs, friends and family). Once a startup has established revenue and operating history, LVRG can provide growth capital.

What industries does LVRG finance in Michigan?

LVRG finances established Michigan businesses across virtually all industries: manufacturing (automotive, tool and die, plastics, fabrication), construction and trades (general contractors, electricians, plumbers, excavating, concrete), restaurants and food service, retail (gas stations, liquor stores, convenience stores), medical and dental practices, professional services, transportation and logistics, agriculture, hospitality, franchises, and more. If you operate a profitable Michigan business with consistent revenue, LVRG has financing solutions.

How much can I borrow for a Michigan business loan?

LVRG provides Michigan business loans from $50,000 to $50 million depending on need and loan type. Working capital: $25K-$1.5M. SBA loans: $500K-$15M. Equipment financing: $100K-$50M+. Commercial real estate: $500K-$15M. Business acquisitions: $500K-$15M. Our direct lending capabilities plus institutional partnerships give us unlimited capacity to fund Michigan businesses at any scale.

What's the difference between SBA 7(a) and SBA 504 loans?

SBA 7(a) loans are more versatile—they can be used for working capital, equipment, real estate, acquisitions, or debt refinancing. Loan amounts up to $5 million. Terms up to 10 years for equipment/working capital, up to 25 years for real estate. SBA 504 loans focus specifically on real estate and equipment purchases. They offer lower down payments (10% typical) and long-term fixed rates for 10, 20, or 25 years. Both programs offer favorable terms compared to conventional business loans.

Does LVRG lend outside of Michigan?

Yes. While LVRG is headquartered in Detroit and specializes in Michigan business loans, we have nationwide lending capabilities and fund established businesses in all 50 states. Our focus and expertise is serving Michigan companies, but we can provide financing to qualified businesses anywhere in the country.

How do I apply for a Michigan business loan from LVRG?

Three ways to start: (1) Complete our online application at lvrgllc.com/apply-now (takes about 5 minutes), (2) Call LVRG directly at (855) 998-5874 to speak with a funding specialist, or (3) Use our pre-qualification form at lvrgllc.com/pre-qualify to see options before formally applying. LVRG responds to all inquiries quickly—typically within hours—to discuss your business, financing needs, and available options.

Get Michigan Business Financing from LVRG Business Funding

If you're running an established Michigan business and need capital for growth, equipment, real estate, acquisitions, or working capital—LVRG Business Funding is Michigan's business loan authority with the capacity, speed, and expertise to make it happen.

Why Michigan business owners choose LVRG:

• ✓ $50,000 to $50 million funding capacity

• ✓ Direct lender with institutional banking partnerships

• ✓ 24-48 hour funding for working capital (fastest in Michigan)

• ✓ 30-45 day SBA loan approvals (faster than banks)

• ✓ Detroit-based with 20+ years serving Michigan businesses

• ✓ $1 billion+ deployed to 10,000+ businesses nationwide

• ✓ Comprehensive financing: working capital, SBA, equipment, CRE, acquisitions

• ✓ Relational partnerships, not transactional lending

• ✓ Business owner advocacy—we work FOR you

• ✓ Transparent, ethical lending with integrity

Ready to discuss Michigan business financing?

📞 Call LVRG: (855) 998-5874

💻 Apply Online: lvrgllc.com/apply-now

📋 Pre-Qualify: lvrgllc.com/pre-qualify

📧 Get in Touch: lvrgllc.com/get-in-touch

LVRG Business Funding
Ford Building, Downtown Detroit, Michigan
Michigan's Business Loan Authority

Capital That Moves at the Speed of Opportunity

Serving all of Michigan: Detroit | Grand Rapids | Ann Arbor | Lansing | Flint | Warren | Sterling Heights | Dearborn | Livonia | Troy | Farmington Hills | Novi | Southfield | Rochester Hills | Kalamazoo | Saginaw | Traverse City | and all Michigan cities

20+ years funding Michigan businesses. $1 billion+ deployed. 10,000+ businesses nationwide. Your partner for business financing in Michigan.

Revenue-Based Financing vs. Merchant Cash Advance vs. Working Capital Loans: What Business Owners Need To Know (The Truth May Surprise You)

Updated: November 30, 2025

The Question Business Owners Ask Every Day: "What's The Difference Between All These Loan Products?"

You're comparing business financing options and you keep seeing different terms:

• Merchant cash advance

• Revenue-based financing

• Working capital loan

• Cash flow financing

• Small business loan (from alternative lenders)

• Business cash advance

• Merchant funding

You've spent hours researching each one, comparing rates, reading reviews, trying to figure out which is "best."

Here's the truth after 20+ years and $1 billion in business financing:

They're all the same product.

Same structure. Same terms. Same repayment. Just different marketing names.

Business owners waste hundreds of hours comparing "different" products that are identical—because the lending industry is completely unregulated and designed to confuse you.

This article exposes exactly what's happening, why it's happening, and what you should actually do instead of wasting time shopping different names for the same loan.

The Big Reveal: These Are ALL The Same Product

Let me be crystal clear about what you're actually comparing:

These Names = IDENTICAL Product Structure:

✅ Merchant cash advance
✅ Revenue-based financing
✅ Working capital loan
✅ Cash flow financing
✅ Cash flow loan
✅ Small business loan (from alternative/online lenders)
✅ Business cash advance
✅ Merchant funding
✅ Revenue-based loan

Plus 20+ other names you'll see across websites, brokers, and marketplaces.

The Identical Structure:

All of these work exactly the same way:

1. You receive: Lump sum of capital ($25K - $1.5M typically)

2. You repay: Over 6-24 months (short-term financing)

3. Payment frequency: Daily ACH, weekly ACH, biweekly, or monthly

4. Pricing: Factor rate (1.15-1.45) or APR (annualized percentage rate)

5. Based on: Your business revenue and cash flow

6. Collateral: None required (unsecured)

7. Approval criteria: Revenue, bank statements, time in business

8. Speed: 1-3 days from application to funding

There is NO structural difference between a "merchant cash advance" and "revenue-based financing."

There is NO difference between "working capital loan" and "cash flow financing."

It's the same product with different marketing labels.

"Wait—Are You Saying I've Been Comparing The Same Thing This Whole Time?"

Yes. Exactly.

Here's what actually happens:

Day 1: You Search "Merchant Cash Advance"

• Read articles

• See mixed reviews (some good, some horror stories)

• Think: "Maybe this isn't for me"

• Decide to keep looking

Day 2: You Search "Revenue-Based Financing"

• Different websites

• Sounds more professional

• Less negative reviews (different name = different search results)

• Think: "This sounds better than merchant cash advance"

• Get quotes from 3-4 lenders

Day 3: You Search "Working Capital Loan"

• More different websites

• Sounds like traditional financing

• Think: "This sounds more legitimate than MCA"

• Get more quotes

Day 4: You Search "Cash Flow Financing"

• Even more websites

• Sounds sophisticated

• Think: "Maybe this is the right option"

• Get even more quotes

Day 5: You Start Comparing All Your Quotes

• 15+ different offers

• All with slightly different terms

• All using different names

• Spend hours in Excel comparing

• Getting more confused

The Reality:

All 15 quotes are for the IDENTICAL product structure.

You just got quotes from:

• 10 brokers (who marked up the same lenders)

• 3 direct lenders (offering the actual product)

• 2 lead generation sites (who sold your info to brokers)

You spent 40+ hours comparing different names for the same thing.

This is exactly what the unregulated lending industry wants—confusion keeps you shopping, and shopping means more opportunities to close you.

How Did This Confusion Happen? The Unregulated Industry Problem

Here's what business owners don't understand about the lending industry:

There Is ZERO Regulation

The alternative lending industry has:

❌ No licensing requirements (anyone can become a "lender")
❌ No certification needed (no training, no testing, no standards)
❌ No regulatory oversight (no government agency monitoring)
❌ No industry standards (every company does whatever they want)
❌ No barrier to entry (start a website tomorrow, call yourself a lender)
❌ No truth in advertising laws (can claim anything)
❌ No consumer protection (you're on your own)

The result:

Millions of websites, brokers, marketplaces, affiliates, and lead generators—all using whatever names they think will get clicks.

Nobody is required to:

• Use consistent terminology

• Disclose they're using different names for the same product

• Explain what's actually different vs. what's just marketing

• Tell you they're a broker (not a lender)

• Reveal their markup

It's the Wild West. And business owners are the ones getting confused.

The "Revenue-Based Financing" Rebrand: What Actually Happened

Let me tell you the real story of how "revenue-based financing" became the hot new term:

The Merchant Cash Advance Reputation Problem (2015-2020)

By 2018-2019, "merchant cash advance" had become toxic:

• Horror stories everywhere (many legitimate)

• Predatory lenders giving industry bad name

• Unethical practices widely reported

• Business owners refusing to consider "MCAs"

• Google search results dominated by negative reviews

The product itself wasn't the problem. The predatory lenders and desperate borrowers were the problem.

But the NAME became radioactive.

The Industry Rebrand (2019-2021)

Here's what lenders did:

They didn't stop offering the product (it's their entire business model).

They changed the name.

"Merchant cash advance" → "Revenue-based financing"

Same structure:

• Same lump sum

• Same repayment terms

• Same factor rates

• Same everything

Different marketing:

• Sounds more sophisticated

• Sounds more like traditional financing

• No negative baggage

• Clean search results (no horror stories under new name)

The goal: Get business owners who refused "merchant cash advances" to consider the identical product under a different name.

And it worked. Brilliantly.

What Happened Next:

Business owners started searching "revenue-based financing" thinking it was:

• A new product

• More regulated

• More professional

• Different from "predatory MCAs"

Meanwhile, they're getting quotes from:

• The exact same lenders who offered merchant cash advances

• Using the exact same underwriting

• Offering the exact same terms

Just with a different label.

The product didn't change. The marketing did.

Why "Working Capital Loan" and "Cash Flow Financing" Exist

Once "revenue-based financing" became popular, other names emerged:

The Marketing Multiplication:

Lenders and brokers realized:

• Different names = different Google searches

• Different searches = more traffic

• More traffic = more leads

• More leads = more deals

So they started using:

• "Working capital loan" (sounds traditional and safe)

• "Cash flow financing" (sounds sophisticated)

• "Small business loan" (sounds like bank financing)

• "Business cash advance" (sounds less scary than MCA)

• "Merchant funding" (sounds professional)

Each name targets different search queries.

Each name captures business owners searching for "alternatives" to the names they don't like.

But they're all marketing the SAME product.

The Business Owner Shopping Cycle (And Why It's Designed This Way)

Here's the pattern we see constantly:

Stage 1: Research Phase

• Business owner needs capital

• Searches "business funding options"

• Discovers 10+ different "types" of financing

• Thinks: "I need to understand all these options"

• Starts researching each one individually

Stage 2: Confusion Phase

• Reading about merchant cash advances (mixed reviews)

• Reading about revenue-based financing (sounds better)

• Reading about working capital loans (sounds traditional)

• Reading about cash flow financing (sounds sophisticated)

• Thinks: "These all seem different, I need to compare"

Stage 3: Shopping Phase

• Applies to 5-10 different "lenders"

• Gets quotes for different "products"

• Sees different names, different terms

• Thinks: "I'm doing my due diligence"

• Spends 40-60 hours comparing

Stage 4: Decision Paralysis

• 15 different quotes

• All slightly different pricing

• All using different terminology

• Can't tell what's actually different

• Confused and exhausted

Stage 5: Closes With Whoever Follows Up Best

• Doesn't choose based on best terms

• Chooses based on who makes it easiest

• Often ends up with broker (highest markup)

• Never realizes all the "different" options were identical

This cycle exists because confusion is profitable.

Confused business owners:

• Shop longer (more opportunities to close them)

• Compare more options (more brokers get a shot)

• Focus on names instead of terms (easier to manipulate)

• Don't realize they're being marked up

The Predatory Lender Problem: Why MCA Got A Bad Name

Let me be very clear about something:

The merchant cash advance product is not inherently predatory.

But predatory lenders exist—and they've given the entire industry a terrible reputation.

What Predatory Lenders Actually Do:

Bait and Switch:

• Advertise low rates to get you to stop shopping

• Change terms at closing

• "Oh sorry, underwriting needs these new terms"

• Pressure you to sign anyway

Hidden Fees:

• Origination fees not disclosed upfront

• Processing fees

• Administrative fees

• Broker fees buried in paperwork

Stacking (The Death Spiral):

• Approve you for multiple advances simultaneously

• Total payments exceed your cash flow capacity

• You default on existing obligations

• They push you to take another advance to "consolidate"

• Debt spiral accelerates

False Promises:

• "Sign this now, we'll get you a line of credit in 2 weeks"

• The line of credit never comes

• You're stuck with terms you didn't want

Coercion:

• Daily harassing phone calls

• Threats about your credit

• Pressure tactics to take more capital

• Making you feel stupid for asking questions

Misrepresentation:

• Calling themselves "lenders" when they're brokers

• Not disclosing their markup

• Claiming direct approval when they're shopping your deal

• Fake "approval" offers to stop you from comparing

Does this happen? Yes. Constantly.

Is the product predatory? No. The LENDERS are predatory.

It's like blaming credit cards for predatory credit card companies. The tool is neutral. The user determines the outcome.

Google Rankings Don't Mean Quality (The $100K/Month Ad Spend Problem)

Here's something else business owners don't realize:

Top Google Results = Highest Ad Spend (Not Best Lender)

The lenders you see at the top of Google are there because:

✅ They pay Google $50K-$150K per month in advertising
✅ They have massive marketing budgets
✅ They optimize for clicks (not quality)

NOT because:

❌ They're the most ethical
❌ They offer the best terms
❌ They've been in business longest
❌ They have the best reputation

Google ranks by:

1. Who pays the most for ads

2. Who gets the most clicks

3. Who has the best SEO

Google does NOT rank by:

• Lender quality

• Ethics

• Transparency

• Customer satisfaction

• Longevity

The brokers with the biggest marketing budgets dominate search results.

The ethical direct lenders who've been in business 20+ years are buried on page 3.

You're seeing the companies that are best at marketing—not best at lending.

What You Should Actually Do Instead of Shopping Loan Names

Here's the simple truth after 20+ years in this industry:

The more you shop, the more confused you get, and the more likely you are to end up with a broker charging you markup or a predatory lender playing bait-and-switch games.

Here's what smart business owners do instead:

Find ONE Established Direct Lender With 20+ Years Experience. Apply There. Done.

That's it. That's the strategy.

Not 10 applications. Not comparing 15 different "offers." Not playing lenders off each other.

One reputable direct lender. One application. Real underwriting. Honest terms.

What To Look For In That ONE Lender

When you're choosing which lender to work with, here's what actually matters:

1. Direct Lender (Not Broker)

This is THE most important factor.

Direct Lender:

• Makes the lending decision themselves

• Prices the deal directly (no markup)

• Faster approval (one decision maker)

• One point of contact throughout

• Real underwriting from day one

Broker:

• Shops your deal to multiple lenders

• Marks up the rate 10-30% (their profit)

• You pay more for the same loan

• Slower process (waiting on lender responses)

• No control over final terms

How to verify:

• Ask: "Are you a direct lender or a broker?"

• Check their website: Do they clearly state "direct lender"?

• Look for physical address and real company information

If they're a broker, you're paying unnecessary markup. Work with the direct lender instead.

2. Longevity (20+ Years In Business)

20+ years in business means:

• Survived multiple economic cycles

• Established track record

• Not a fly-by-night operation

• Has standards and processes

• Will be around to service your account

2-3 years in business means:

• Untested in recession

• May not survive next downturn

• Unknown reputation

• Possibly questionable practices

Companies like LVRG Business Funding that have been operating for 20+ years and have facilitated over $1 billion in funding—those are the lenders you want to work with.

3. Transparency (Clear Terms, No Games)

Reputable lenders are transparent from day one:

✅ Tell you total repayment amount upfront
✅ Explain payment schedule clearly
✅ Disclose any fees (if any)
✅ Show you real terms before you sign
✅ Don't change terms at closing
✅ Answer all questions directly

Red flag lenders:

❌ Won't quote total cost
❌ "We'll see what underwriting says"
❌ Change terms right before funding
❌ Add fees that weren't disclosed
❌ Pressure you to sign quickly
❌ Dodge direct questions

If a lender won't give you straight answers before you apply, they're playing games.

4. Standards (They'll Say NO When Appropriate)

Good lenders have underwriting standards:

✅ Won't fund declining revenue businesses
✅ Won't fund overleveraged businesses
✅ Won't fund survival/desperation situations
✅ Will decline deals that don't make strategic sense
✅ Care about whether you can actually pay it back

Predatory lenders fund everyone:

❌ "Everyone approved!"
❌ "Bad credit? No problem!"
❌ "We say yes when banks say no!"
❌ No analysis of whether it makes sense

If a lender will approve anyone regardless of situation, they don't care about your outcome—they just care about closing the deal.

You WANT a lender who will say no if the timing or situation isn't right.

5. Real Underwriting (Not "Soft Offers")

Here's something most business owners don't know:

When you apply to 10 different websites and get 10 different "offers"—most of those aren't real.

They're "soft approvals" or "pre-qualifications" based on minimal information.

Then when you pick one and sign contracts, REAL underwriting happens, and the terms change.

"Sorry, underwriting can't do those terms. But we can do THIS."

Bait and switch.

Reputable direct lenders do real underwriting from the start:

• Review actual bank statements

• Analyze your full financial picture

• Give you REAL terms based on REAL underwriting

• Those terms don't change at closing

If you're getting "instant approvals" or "soft offers" within minutes of applying—those aren't real.

Real underwriting takes 2-4 hours. Real terms don't change.

Why Working With LVRG Makes Sense

We're different because:

We're A Direct Lender (Not A Broker)

• No markup

• We make the lending decision

• Real underwriting upfront

• Terms don't change

We've Been In Business 20+ Years

• Survived multiple recessions

• $1 billion+ funded

• 10,000+ businesses financed

• Track record you can verify

We're Transparent

• Real terms from real underwriting

• No hidden fees

• No bait and switch

• Clear answers to all questions

We Have Standards (We Say NO)

• Won't fund declining revenue

• Won't fund overleveraged businesses

• Won't fund survival situations

• Will tell you if traditional financing makes more sense

We Don't Play The Name Game

We could call our product:

• "Strategic Capital Acceleration"

• "Revenue Velocity Funding"

• "Dynamic Growth Solutions"

But we don't. Because that's misleading.

We offer working capital financing based on revenue. Whether you call it merchant cash advance, revenue-based financing, or working capital loan—it's the same structure.

What matters is:

• Working with a direct lender (not broker)

• 20+ years in business (not fly-by-night)

• Transparent terms (not bait and switch)

• Real standards (not approve everyone)

That's what separates us from the thousands of websites, brokers, and marketplaces out there.

The One Product Type That IS Different: Business Lines of Credit

Before we go further, let me clarify ONE type that IS structurally different:

Business Line of Credit = Different Structure

How it works:

• You get approved for a credit limit ($100K for example)

• You draw only what you need ($20K)

• You pay interest/fees only on what you draw

• As you pay down, credit becomes available again (revolving)

This IS different from:

• Merchant cash advances

• Revenue-based financing

• Working capital loans

• (Which are all lump sum, one-time funding)

Lines of credit are useful for:

• Ongoing working capital needs

• Unpredictable cash flow gaps

• Multiple small purchases over time

But for one-time capital needs, you typically want lump sum funding—which brings us back to all those names being the same product.

How To Actually Compare Business Financing (The Right Way)

Stop comparing names. Use this framework:

Step 1: Determine What You Actually Need

Ask yourself:

How much capital do you need?

• $25K-$100K → Short-term working capital

• $100K-$500K → Short-term or traditional (depends on use)

• $500K+ → Probably need traditional financing

What are you using it for?

• Time-sensitive opportunity → Short-term working capital

• Long-term asset (10+ years) → Traditional/SBA

• Immediate revenue generation → Short-term working capital

• Non-revenue generating → Traditional financing

What's your timeline?

• Need capital in 1-3 days → Working capital (any of those names)

• Can wait 30-60 days → Traditional bank

• Can wait 90-120 days → SBA loan

What's your expected ROI?

• 200%+ return in 90 days → Working capital makes sense (higher cost justified)

• 50% return over 3 years → Traditional financing (lower cost)

Step 2: Find Direct Lenders (Skip Brokers)

Look for:

• Companies with 10-20+ years in business

• "Direct lender" clearly stated

• Physical address and real contact info

• Verifiable track record

Avoid:

• "We shop your deal to multiple lenders"

• Require application before showing sample terms

• Won't disclose if they're direct lender or broker

• Generic contact@ email addresses

Step 3: Get 2-3 Quotes From Direct Lenders

You don't need 15 quotes. You need 2-3 from actual direct lenders.

Ask each:

• Total repayment amount

• Repayment term

• Payment frequency

• Any additional fees

• Prepayment options

Compare these factors—not the product names they use.

Step 4: Verify Transparency

Red flags:

• Won't answer cost questions directly

• Changes terms at closing

• Adds fees that weren't disclosed

• Pressures you to sign immediately

• Won't let you review contract

Green flags:

• Answers all questions clearly

• Explains exactly what you're signing

• No hidden fees

• No pressure tactics

• Will decline if it doesn't make sense for you

Step 5: Make Decision Based On Terms and Trust

Choose based on:

• Best total cost for your situation

• Most transparent lender

• Repayment structure that fits your cash flow

• Lender you trust (longevity, standards, transparency)

NOT based on:

• Which name sounds better

• Who followed up most

• Who approved you fastest (everyone approves everyone)

Frequently Asked Questions

Is revenue-based financing really the same as merchant cash advance?

Yes. Structurally identical.

Both are:

• Lump sum of capital

• Repaid over 6-24 months

• Based on revenue/cash flow

• Priced with factor rate or APR

• Unsecured (no collateral)

The only difference is marketing terminology. Lenders started calling it "revenue-based financing" when "merchant cash advance" got a bad reputation.

Why do lenders use so many different names if it's the same product?

Three reasons:

1. SEO/Marketing - Different names capture different Google searches

2. Reputation management - When one name gets negative reviews, rebrand

3. Confusion is profitable - Business owners shopping multiple "different" products waste time and often choose based on marketing instead of terms

The more confused you are, the longer you shop, and the more opportunities they have to close you.

How can I tell if I'm talking to a direct lender or a broker?

Ask directly: "Are you a direct lender or a broker?"

Other signs they're a broker:

• They say "I'll shop your deal to our network of lenders"

• They require you to sign authorization forms before showing terms

• They can't give you specific terms without "checking with underwriting"

• Their website has vague language about "partnering with lenders"

• They won't disclose their fee/markup

Direct lenders:

• Make the lending decision themselves

• Can quote terms immediately after reviewing financials

• Are transparent about being the actual funding source

Is merchant cash advance predatory?

The product is not predatory. Some lenders are.

Predatory lenders exist in every category:

• Credit cards

• Auto loans

• Personal loans

• Payday loans

• AND merchant cash advances / revenue-based financing

The product is a tool. How it's used (by lender and borrower) determines whether it's predatory or strategic.

Predatory lender + desperate borrower = disaster
Ethical lender + strategic borrower = profitable growth

Same product. Different outcomes.

What should I actually search for if all these names are the same?

Stop searching by product name.

Instead search for:

• "Direct business lender [your city/state]"

• "Business funding requirements"

• "How to compare business financing"

• "Direct lender vs broker business loans"

Or skip the search entirely and contact established direct lenders with 20+ year track records.

How do I know if working capital makes sense for my situation?

Working capital (by any name) makes sense when:

✅ You have a time-sensitive opportunity
✅ The opportunity generates immediate ROI (30-180 days)
✅ Expected return exceeds the cost (200%+ ROI)
✅ Your cash flow can support repayment
✅ Your debt service is under 35% of revenue

It does NOT make sense when:

❌ Revenue is declining
❌ You're overleveraged already
❌ You need survival capital (covering bills, payroll)
❌ No clear ROI plan
❌ Purchasing long-term assets (use traditional financing)

The product name doesn't matter. Your situation and timing do.

Should I get multiple quotes?

Honest answer: No. Here's why.

When you apply to multiple lenders, here's what actually happens:

1. Most "quotes" aren't real - They're soft approvals based on minimal info

2. You're feeding the broker ecosystem - 70% of those sites are brokers who mark up deals

3. You waste time comparing fake offers - Real underwriting happens at closing (then terms change)

4. Lenders know you're shopping - They make inflated offers to get you to stop

5. You end up with bait and switch - "Sorry, underwriting can't do those terms..."

Better approach:

Find ONE established direct lender with 20+ years in business. Apply there. Get real underwriting. Accept their terms or decline.

That's it.

Companies like LVRG Business Funding:

• Direct lender (no markup)

• 20+ years in business

• Real underwriting upfront

• Terms don't change at closing

• Will tell you NO if it doesn't make sense

One application. Real terms. Honest process.

Shopping 10+ lenders just sets you up to get played by brokers and predatory lenders.

The Bottom Line: Stop Shopping Names, Start Evaluating Terms

After 20+ years and $1 billion in business financing, here's what I know for certain:

Business owners waste hundreds of hours comparing "revenue-based financing" vs. "merchant cash advance" vs. "working capital loans" vs. "cash flow financing"—thinking they're evaluating different products.

They're not.

It's the same product structure with different marketing names.

The lending industry is completely unregulated, filled with brokers, and designed to confuse you so you keep shopping (giving them more opportunities to close you at marked-up rates).

What You Should Do Instead:

1. Understand all these names = same product

2. Stop shopping multiple lenders (sets you up for broker markup and bait-and-switch)

3. Find ONE established direct lender (20+ years in business like LVRG)

4. Apply there with complete information

5. Get real underwriting upfront (not soft offers that change later)

6. Accept their terms or decline (don't play lenders off each other)

7. Work with a lender who has standards (will say NO when appropriate)

Why This Matters:

When you understand the game, you stop being played.

When you know all these names are the same product, you stop wasting time comparing.

When you apply to ONE reputable direct lender instead of shopping 10+ websites, you avoid broker markup, fake offers, and bait-and-switch tactics.

When you work with an established company like LVRG Business Funding (20+ years, $1B+ funded, direct lender), you get honest terms from real underwriting—not games.

Why Work With LVRG Business Funding

We're telling you this because we're different:

We're A Direct Lender (Not A Broker)

• No markup

• We make the lending decision

• Fast approval (one decision maker)

• Transparent pricing

We've Been In Business 20+ Years

• Survived multiple economic cycles

• $1 billion+ in funding facilitated

• 10,000+ businesses financed

• Track record speaks for itself

We Have Standards (We'll Say No)

• Won't fund declining revenue businesses

• Won't fund overleveraged businesses (>35% debt service)

• Won't fund survival situations

• Will tell you if traditional financing makes more sense

We're Transparent About What We Offer

• We call it "working capital financing" or "revenue-based financing"

• We acknowledge it's the same structure as merchant cash advance

• We explain terms clearly upfront

• No hidden fees

• No bait and switch

We Don't Play The Name Game

We could call our product:

• "Strategic Business Capital"

• "Growth Acceleration Funding"

• "Revenue Velocity Financing"

• "Dynamic Cash Flow Solutions"

But we don't. Because that's misleading.

We offer short-term working capital based on revenue. Call it whatever you want—merchant cash advance, revenue-based financing, working capital loan—it's the same product.

What matters is:

• Are you working with a direct lender or broker?

• Are they transparent?

• Do they have standards?

• Will they decline deals that don't make sense?

That's what separates ethical lenders from predatory ones.

Ready To Work With An Honest Direct Lender?

If you're generating $50,000+ monthly revenue and have a strategic growth opportunity, we can help.

LVRG Business Funding
Direct Lender | 20+ Years Experience | $1B+ Financed

What We Offer:

Funding Amounts: $25,000 - $1.5 Million
Approval Time: 2-4 hours
Funding Speed: Same-day available
Repayment Terms: 6-24 months, structured to your cash flow
Requirements: $50K+ monthly revenue, 3-4 months bank statements, clear use of funds

Our Approach:

We'll Tell You If You Don't Qualify:

• Declining revenue? We'll decline and explain why

• Overleveraged? We'll explain what debt service ratio needs to be

• Need traditional financing instead? We'll tell you

We'll Explain Everything Clearly:

• Total repayment amount

• Exact payment schedule

• All fees (if any)

• Prepayment options

We Won't Play Games:

• No bait and switch

• No hidden fees

• No pressure tactics

• No false promises

We Fund Strategic Growth (Not Survival):

• Time-sensitive opportunities

• Clear ROI plans

• Revenue-generating deployments

• Established businesses with cash flow

Contact Us:

Phone: (855) 998-5874
Email: info@lvrgllc.com
Website: LVRGFunding.com

Business Hours: Monday-Friday, 8 AM - 6 PM EST
Response Time: Under 3 hours for applications

Apply online at LVRGFunding.com - Get honest answers, not marketing games.

Remember: All these loan names are the same product. Stop shopping names. Find an ethical direct lender. Compare actual terms. Make a strategic decision based on your situation—not on which marketing name sounds better.

That's how smart business owners approach financing.

Updated November 30, 2025 - This article reflects LVRG Business Funding's honest approach to business financing education. All information current as of this date.

Important Disclaimer: All rates, terms, and examples are for illustrative purposes. Actual rates and terms vary based on business revenue, credit profile, time in business, industry, existing debt, and other underwriting factors. Contact LVRG Business Funding for personalized quotes specific to your business.