SBA Loans in Indiana: The Complete 2025 Guide for Small Businesses

Indiana has long stood out as a flourishing environment for entrepreneurs and small-business owners. As we move into 2025, access to capital is more crucial than ever for sustaining growth, revitalizing local economies, and supporting innovation in the Hoosier State. Understanding the full scope of SBA loan programs available in Indiana can empower you to start, acquire, or grow your business with confidence.

Table of Contents

1. Indiana Small Business Landscape in 2025
2. SBA Loan Programs Available in Indiana
3. Indiana SBA Loan Qualification Criteria (2025)
4. Top SBA Preferred Lenders in Indiana
5. Indiana SBA Loan Application: Step-by-Step
6. Success Stories: Hoosier Business Owners & Realistic Loan Amounts
7. Current Indiana SBA Loan Terms, Rates, and 2025 Updates
8. Local SBA District Offices & Resources in Indiana
9. Indiana State Incentives & Business Programs
10. Frequently Asked Questions

Indiana Small Business Landscape in 2025

Small businesses form the backbone of Indiana’s economy, accounting for over 99% of all businesses and employing nearly half of the workforce. Key industries include manufacturing, logistics, agriculture, and an ever-growing tech sector centered in Indianapolis, Fort Wayne, and South Bend. The state’s favorable business climate and supportive government resources have helped Indiana weather economic shifts and emerge even stronger in 2025.

Funding remains the primary hurdle for both aspiring entrepreneurs and established business owners, making SBA loans a critical pillar in Indiana’s economic development toolkit.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Page 1 of 5

Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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SBA Loan Programs Available in Indiana

Indiana entrepreneurs have access to the full spectrum of federal Small Business Administration loans, uniquely structured to support startups, acquisitions, real estate purchases, working capital needs, and equipment financing. Here’s an in-depth look at the main SBA loan options for 2025:

1. SBA 7(a) Loan Program

• Most popular and flexible SBA-backed loan.
• Use for startup costs, acquisitions, working capital, equipment, inventory, and refinancing.
• Loan amounts: $30,000 to $5 million.
• Terms: Up to 10 years for working capital, 25 years for real estate.
• 2025 Interest Rates: 8.5% to 11.0% variable (Prime + spread, updated quarterly).

2. SBA 504 Loan Program (Real Estate & Equipment)

• Designed for commercial real estate acquisition, renovation, construction, and significant fixed capital purchases such as large equipment.
• Loan amounts: $100,000 to $5.5 million or more for qualifying projects.
• Terms: Up to 25 years (real estate), 10-20 years (machinery/equipment).
• Interest Rates: Fixed rates from 6.4% to 7.2% (as of Q2 2025).
• Structure: 50% bank loan, 40% SBA/CDC loan, 10% borrower down payment.

3. SBA Microloans

• Geared toward startups and very small businesses, including minority- and women-owned enterprises.
• Loan amounts: $5,000 to $50,000.
• Terms: Up to 6 years.
• Rates: 8% to 13% depending on intermediary lender and borrower qualifications.

4. SBA Express Loans

• Faster approval (36 hours in most cases), less paperwork.
• Loan amounts: Up to $500,000.
• Great for working capital, lines of credit, and small expansions.
• 2025 Rates: 8.5% to 12.5%.

5. SBA Export & Specialty Loan Programs

• Export Express, Export Working Capital, and International Trade Loans help Indiana businesses enter or expand in overseas markets.
• Loan amounts: Up to $5,000,000.

Indiana SBA Loan Qualification Criteria (2025)

SBA loans are designed to be more attainable than most conventional financing. To qualify, Indiana businesses generally must:

• Operate as a for-profit business in Indiana.
• Demonstrate business viability and a reasonable ability to repay.
• Meet size standards (typically fewer than 500 employees or below industry revenue caps).
• Have exhausted other non-SBA funding options (SBA is a lender of last resort).
• Owner(s) must have good personal credit (typically 650+ for 7(a)/504).
• May require down payment:
  • 7(a): Often 10%-20% for startups/acquisitions.
  • 504: Standard 10% (sometimes up to 20%) down.
• Provide collateral for some loan types (often real estate or significant business assets).
• Cannot be involved in gambling, lending, or speculative real estate ventures.

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Startups typically must provide a robust business plan and show relevant managerial experience.

Top SBA Preferred Lenders in Indiana

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Many local and national banks are authorized as SBA Preferred Lenders (PLP), meaning they can approve loans faster and with fewer SBA reviews. Five leading SBA lenders in Indiana for 2025 include:

1. Old National Bank (Evansville, state-wide): Indiana’s largest bank, specializing in 7(a) and 504 loans up to $5M for Hoosier businesses.
2. Lake City Bank (Warsaw, IN): Known for strong SBA lending, especially with startups and manufacturing businesses.
3. Huntington National Bank (state-wide): Top 10 national SBA lender with streamlined processes for working capital and business acquisitions.
4. Centier Bank (Merrillville/local branches): Exceptional service for real estate and equipment-focused 504 and 7(a) lending.
5. 1st Source Bank (South Bend and statewide): Focused on Main Street businesses, SBA Express loans, and commercial expansions.

Other active SBA lenders include Fifth Third Bank and Regions Bank, both with statewide footprints.

Indiana SBA Loan Application: Step-by-Step (2025)

1. Assess Eligibility: Review SBA program requirements for your business size, industry, and credit history.
2. Identify the Right Loan Program: Choose from 7(a), 504, Microloan, Express, or Export programs based on your goals (i.e., commercial real estate, equipment, or working capital).
3. Gather Documentation:
   • Personal and business tax returns (last 3 years)
   • Current business financials
   • Business plan (for startups/acquisitions)
   • Ownership and management profiles
   • Business licenses, articles of incorporation, and legal documents
   • Lease agreements (if applicable)
4. Select a Preferred Lender: Reach out to an Indiana SBA Preferred Lender (see above) for pre-qualification and guidance.
5. Submit Loan Application: Complete the lender and SBA forms (such as SBA Form 1919/1920 for 7(a)), supply all supporting documentation.
6. Lender/SBA Review: Underwriting, credit review, and SBA guarantee processing (timeline: Express loans ~1 week, Standard 7(a)/504 ~3-8 weeks).
7. Closing & Funding: Review and sign loan documents. Funds are released; for 504 loans, bank/CDC/SBA portions are disbursed per project schedule.

Work closely with your banker—Indiana’s Preferred Lenders and local SBA offices assist in ensuring a smooth application process.

Success Stories: Hoosier Business Owners & Realistic Loan Amounts

• Business Acquisition – South Bend: In 2024, a local entrepreneur acquired an established cleaning franchise using a $350,000 SBA 7(a) loan from Lake City Bank, enabling the purchase, working capital, and initial payroll expansion.
• Commercial Real Estate – Indianapolis: A growing fabrication shop secured a $1.7 million SBA 504 loan through Old National Bank and Indiana Statewide CDC, financing a new 15,000-square-foot facility and expanding operations.
• Equipment Financing – Fort Wayne: A custom manufacturing startup accessed a $150,000 SBA Express loan via Huntington National Bank to buy advanced CNC machinery for a new product line launch.
• Working Capital – Evansville: A family-owned restaurant group leveraged a $75,000 SBA Microloan via Flagship Enterprise Center for remodel and inventory expansion, supporting 12 jobs.

These examples reflect realistic uses of SBA financing across various industries and regions of Indiana in today’s market.

Current Indiana SBA Loan Terms, Rates, and 2025 Updates

The current interest rate environment in 2025 is moderately elevated compared to historic lows, but SBA loan rates remain below most conventional business loan options:

• 7(a) Loans: Prime + 2.75%–4.75% (typically 8.5%–11.0% in Q2-2025)
• 504 Loans: Long-term fixed rates, 6.4%–7.2%
• SBA Express: Prime + 4.5%–6.5% (max 12.5%)
• Microloans: 8%–13%

Key 2025 SBA updates:

• Faster digital processing and e-signature capabilities streamline approvals.
• Reduced guarantee fees and expanded eligibility for certain underserved communities.
• SBA Green Incentives on 504 loans for energy-efficient projects in Indiana.

Local SBA District Offices & Resources in Indiana

For hands-on support, financial literacy, and program navigation:

• Indiana District Office
  8500 Keystone Crossing, Suite 400
  Indianapolis, IN 46240
  Phone: (317) 226-7272
  SBA Indiana District Office
• SCORE Indiana – Free business mentoring: indiana.score.org
• SBDC Network – Business planning/advisory across IN: isbdc.org
• Women’s Business Centers (WBC): Serving Bloomington and Indianapolis entrepreneurs.

Indiana State Incentives & Business Programs

• EDGE Tax Credits: Rewards job creation and capital investment in Indiana businesses.
• Hoosier Business Investment Tax Credit: Credits for qualified capital investments.
• Next Level Jobs Grants: Training grants (up to $50,000 per business for workforce training).
• Certified Technology Parks: Incentives for tech startups locating in designated zones.
• INvestEd Indiana: Low-interest lending and support for early-stage companies.

Pairing an SBA loan with these local and state incentives maximizes your working capital and accelerates growth.

Frequently Asked Questions

Q: Can Indiana startups get SBA loans in 2025?

A: Yes, especially through the 7(a) program, microloans, and some Express products. Strong business plans and relevant management experience are key.

Q: What is the typical SBA loan down payment in Indiana?

A: Usually 10%–20%, with 504 loans requiring 10%–15% from the borrower (potentially more for startups or single-purpose properties).

Q: How fast can I get funding?

A: SBA Express loans can close in as little as 7–10 days; standard 7(a) and 504 may take 3–8 weeks depending on documentation and underwriting.

Q: Can I use an SBA loan to buy out a partner or acquire a business?

A: Yes, especially via the 7(a) program, which supports both business acquisition financing and partner buyouts in Indiana.

Indiana’s SBA resources are here to help you turn ambition into a thriving enterprise. Connect with local lenders and advisors to chart your 2025 growth plan.

Get a No Obligation Quote Today.

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