SBA 7(a) or a term loan for a restaurant build-out?

On price the 7(a) wins; on your six-week clock the term loan wins. That is the entire trade, and the deadline is doing more work in this decision than the rate is. A 7(a) build-out loan is commonly written over ten years and a bank term loan on the same money is usually five, which moves the monthly payment far more than a point or two of interest ever will.

• 7(a): commonly ten years on a build-out, 30 to 90 days to fund, full tax returns and a line-by-line use of funds
• Bank term loan: commonly five years, two to four weeks to fund, a much lighter file
• The same $420,000 stretched over ten years instead of five roughly halves the payment before rate is even discussed
• SBA guaranty fees are normally financed into the loan rather than paid in cash at closing

The warning is the lease. A build-out loan against leasehold improvements you do not own is only as good as the remaining lease term, and SBA lenders generally want the lease — including renewal options — to run at least as long as the loan. If your landlord gave you a five-year lease with no options, the ten-year 7(a) you are being promised may not exist in the form you were told.

If the six weeks are genuinely fixed, the honest sequence is often a Business Term Loan now and an SBA Loan refinance once the location is open and seasoned. Call the desk with the lease term and the contractor's draw schedule — those two documents decide which of the two your file can actually support.