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SBA Preferred Lending at Exchange Bank: 7(a), 504, Express and CAPLines Packaged In-House

Exchange Bank holds Preferred Lender Program (PLP) status with the Small Business Administration, meaning SBA 7(a) and 504 credit decisions are made in-house by the bank's credit team rather than routed through the Small Business Administration for each file. The in-house decisioning typically compresses timeline from 10-12 weeks at non-preferred lenders to 6-8 weeks on a well-documented file. For Sonoma County hospitality, agriculture, construction and professional-services borrowers, the time saved often makes the difference between closing on an opportunity and losing it.

The SBA team packages SBA 7(a) to $5M, SBA 504 for owner-occupied real estate and heavy equipment with CDC partners, SBA Express to $500K with expedited turnaround, and SBA CAPLines revolving facilities. Underwriting follows Reg B, the SBA Standard Operating Procedure (SOP 50 10), and supervisory guidance from the California DFPI and the FDIC.

Talk to the SBA Team Compare Conventional Credit
Exchange Bank SBA Preferred Lending dashboard showing 7(a), 504, Express and CAPLines pipeline for Sonoma County hospitality and agriculture borrowers

Line of Credit Brief: Four SBA Programmes Packaged In-House

Each SBA programme answers a different capital question. 7(a) is the generalist. 504 is the real-estate and heavy-equipment specialist. Express is the fast track. CAPLines is the revolving line.

SBA 7(a) — Up to $5M

SBA 7(a) is the SBA's flagship programme, scaling to $5 million in principal. Proceeds can fund working capital, equipment, inventory, owner-occupied real estate, business acquisition, partner buy-out and debt refinance meeting SBA eligibility. Terms run up to 10 years for working-capital and equipment components and up to 25 years for real-estate components — often blended into a single weighted-average amortisation. Pricing is fixed or variable, indexed to prime plus an SBA-allowed spread. The SBA guaranty runs 75% on loans over $150K and 85% on loans at or below $150K, which makes the programme central to Exchange Bank lending for credits that need term extension beyond conventional commercial ceilings.

SBA 504 — Owner-Occupied Real Estate & Equipment

SBA 504 finances owner-occupied commercial real estate and heavy equipment with a 10+ year useful life. The three-part structure combines a 50% LTV first mortgage from Exchange Bank, a 40% LTV second mortgage from a Certified Development Company (CDC) funded by a 10- or 20-year SBA debenture at long-term fixed rates, and a 10% borrower injection. Total project size scales to $5 million, or $5.5 million for qualified manufacturing or energy-efficient projects. The 504 is ideal for owner-occupied building acquisitions, tenant-improvement-intensive build-outs, and heavy-equipment purchases that cannot amortise sensibly on a shorter conventional term.

SBA Express — Up to $500K Fast Track

SBA Express is a streamlined 7(a) variant capped at $500,000 with expedited decisioning. Exchange Bank runs Express files through its in-house credit process with SBA responding to the approval request within 36 hours in most cases. The borrower benefits from materially faster turnaround at the cost of a reduced SBA guaranty (50% rather than 75-85% on standard 7(a)). Express fits smaller working-capital requests, equipment under $500K, and line-of-credit structures where the standard 7(a) timeline is unattractive relative to deal size. Most Express files close in 3-4 weeks from application.

SBA CAPLines — Revolving Facilities

SBA CAPLines is the SBA's family of revolving-credit products. Four variants: Seasonal CAPLine (aligned to seasonal revenue cycles), Contract CAPLine (secured by progress payments on specific contracts), Builders CAPLine (construction financing for general contractors), and Working Capital CAPLine (asset-based on receivables and inventory). Exchange Bank packages CAPLines for Sonoma County seasonal hospitality, construction contractors, and agricultural operators whose capital needs cycle predictably. Lines scale to $5 million. Annual clean-up (Seasonal) or borrowing-base monitoring (Working Capital) apply by variant.

SBA 7(a) for Business Acquisition

A recurring use-case at Exchange Bank is SBA 7(a) for business acquisition — owner retirement transitions, partner buy-outs, strategic acquisitions by existing operators and change-of-control transactions. The SBA 7(a) programme allows goodwill financing (up to $500K of unsecured goodwill, additional with business collateral), seller-note subordination and earn-out structures. Due diligence includes quality-of-earnings validation, legal review of purchase documents, and real-estate allocation if applicable. Acquisition files typically run 8-12 weeks even with PLP decisioning because of the due-diligence load.

Sonoma County Hospitality & Agriculture Focus

The SBA team at Exchange Bank has disproportionate deal flow in Sonoma County hospitality and agriculture verticals. Winery and tasting-room acquisitions, restaurant ownership transitions, boutique inn financing, catering-operation expansions and specialty-foods manufacturing all sit in the pipeline. On the agriculture side, vineyard operations, dairy operators, specialty-produce growers and craft-beverage producers use SBA 7(a) for equipment, expansion and succession. Local vertical expertise means underwriting picks up industry nuance that generic out-of-area SBA desks miss — seasonal cash cycles, harvest timing, production yield norms and tasting-room RevPAR.

SBA Programme Comparison

Maximum amounts, term lengths, down payment expectations and use-case fit across the six programme lines.

ProgrammeMax AmountTermDown PaymentBest ForGuaranty
SBA 7(a) Standard$5M10 yr WC/equip, 25 yr RE10-20% typicalWorking capital, acquisition, equipment, blended use75% >$150K, 85% ≤$150K
SBA 504$5M-$5.5M project10 or 20 yr CDC debenture10% borrower injectionOwner-occupied CRE, heavy equipmentCDC second via SBA debenture
SBA Express$500KUp to 10 yr10-20%Working capital, small equipment, lines of credit50%
SBA 7(a) Acquisition$5M10 yr10% typical, 5% with seller noteOwnership transitions, partner buy-outs75% / 85%
SBA CAPLines Seasonal$5MUp to 10 yr, annual resetVaries by collateralSeasonal hospitality, tasting-room cycles75% / 85%
SBA CAPLines Working Capital$5MUp to 10 yr, asset-basedBorrowing-base advanceGrowing B2B, distributors, manufacturers75% / 85%

PLP Status By the Numbers

Why Preferred Lender status is the operational centrepiece of SBA lending at Exchange Bank.

6-8wkTypical PLP Close Timeline
10-12wkNon-Preferred Timeline
$5MSBA 7(a) Maximum Principal
25yrMax Real Estate Amortisation

Application, Eligibility & Timing

What the SBA file looks like and how it moves through underwriting.

SBA Eligibility Basics

SBA eligibility at Exchange Bank follows the Small Business Administration's Standard Operating Procedure. The borrower must be a for-profit small business (size standard by industry, typically measured in employees or revenue), owner-occupied if real estate is involved, creditworthy under the SBA's credit-elsewhere test, and not engaged in ineligible industries (passive-investment real estate rental, gambling, speculative businesses, illegal activities, pyramid schemes). Size standards are on the SBA Size Standards table. Eligibility is confirmed during the initial intake meeting before full document collection begins.

The credit-elsewhere test is a documentary exercise demonstrating that conventional financing is not reasonably available on comparable terms — a reason SBA programmes exist rather than displacing conventional bank credit.

SBA eligibility intake workflow with size standard check, owner-occupancy verification and credit-elsewhere documentation
SBA 7(a) documentation checklist with tax returns, personal financial statements, business financials and purchase documents if acquisition

Documentation Package

A complete SBA 7(a) or 504 file at Exchange Bank includes three years of business tax returns, three years of personal tax returns for each 20%+ owner, personal financial statements, year-to-date business financials, a business-valuation exhibit (if acquisition or goodwill), purchase agreement and schedules (if acquisition), real-estate appraisal and Phase I environmental (if real-estate collateral), business plan or cash-flow projections, and the standard SBA forms (1919, 413, 912, 1920). The SBA team provides a document checklist at intake and typically walks the borrower through gaps over a 2-3 week collection window.

Document completeness is the single largest driver of timeline. Files missing schedules at submission add 2-4 weeks to the average close.

Closing, Funding & Servicing

Closing on an SBA file involves loan documents from Exchange Bank's in-house loan operations team, title insurance and deed of trust (if real estate), UCC-1 filings on collateral, environmental endorsements, and the SBA Authorization for Debenture Guarantee on 7(a) files. Funding happens at closing for 7(a) and at post-closing debenture sale for 504. Post-close, the borrower's relationship manager remains the primary contact for covenant review, annual renewal, change-of-condition requests and any servicing needs. Loans are serviced in-house in Santa Rosa rather than transferred to a remote servicer.

Annual financial reporting is standard across SBA 7(a) and 504 files. Covenant monitoring tracks DSCR, leverage and any specific deal-structure items negotiated at origination.

SBA closing table with loan documents, UCC filings, title insurance and Exchange Bank relationship manager handoff to servicing

Three SBA Borrower Profiles

Typical deals the SBA team at Exchange Bank closes each quarter.

Boutique Inn Acquisition

Healdsburg boutique inn acquisition, $3.2M total project. SBA 504 structure: $1.6M Exchange Bank first mortgage, $1.28M CDC second through the SBA debenture, $320K buyer injection. 25-year amortisation on the first, 20-year on the debenture. Closed in 9 weeks.

Russian River Lumber Yard

Lumber operation opens second yard in Guerneville. $820K SBA 7(a) for equipment, working capital and leasehold improvements. 10-year term. Funded in 7 weeks under PLP authority. A non-preferred lender previously quoted 16 weeks on the same structure.

Vineyard Owner Transition

Sonoma Valley vineyard owner-transition buy-out. $1.9M SBA 7(a) acquisition with goodwill component, seller note subordinated to the SBA position, and equipment injection. Closed in 11 weeks including QoE analysis. Long-term cash flow supports the buy-out structure.

Connect with the SBA Team

An SBA specialist at Exchange Bank can assess programme fit, size the request and identify document gaps in a 45-60 minute intake. Call the commercial line at 707-524-3000 extension 1100 or visit any Sonoma County branch. Pre-intake checklist available on request.

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People Also Ask

What does Preferred Lender status mean?
PLP status = SBA has delegated approval authority to the bank's in-house credit team. Typical timeline 6-8 weeks vs 10-12 for non-preferred.
SBA 7(a) max size?
$5M statutory maximum. 10 yr WC/equipment, 25 yr real estate.
What does SBA 504 finance?
Owner-occupied real estate and heavy equipment. 50% bank first, 40% CDC debenture, 10% injection.
How is SBA Express different?
Capped at $500K, faster turnaround, 50% guaranty rather than 75-85%.
What are SBA CAPLines?
Revolving lines in four variants: Seasonal, Contract, Builders, Working Capital. Up to $5M.

Related Small Business Services

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Conventional CRE to $10M.

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Operating deposits for SBA-funded relationships.

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ACH, wires, lockbox for growing companies.

Personal Credit

Owner-personal credit supporting guarantor profile.

Digital Banking

SBA loan balance and payment schedule online.

California Community Banking — Topic Cluster