SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

Indiana’s dynamic business environment, low cost of living, and robust workforce make it a prime state for launching and growing small businesses. With changing economic subsidies, upward interest rate trends, and continued post-pandemic recovery, Indiana entrepreneurs look toward government-backed funding to give them a competitive edge. SBA loans remain a critical financing vehicle. This 2025 guide details everything Hoosier business owners need to know about SBA loans in Indiana, including eligibility, top lenders, application steps, and unique local resources.

Why Choose SBA Loans in Indiana?

• Lower down payments (as low as 10%) help conserve cash flow.
• Longer repayment terms (up to 25 years for real estate).
• Competitive interest rates—typically prime + 2.75%–4.75% in 2025.
• Flexible loan uses: working capital, business acquisition, startups, equipment, real estate.
• Government guarantee (up to 85%), improving approval odds.

Types of SBA Loans Available in Indiana (2025)

1. SBA 7(a) Loan Program

The broadest SBA program, ideal for most established businesses. Use for working capital, equipment, business acquisition, startup, or real estate. Indiana lenders commonly finance up to $5,000,000.

• Rates (2025): Prime + 2.75%–4.75%
• Down Payment: 10%–20%
• Terms: Up to 10 years (working capital & equipment); 25 years (real estate)

2. SBA 504 Loan Program

Perfect for Indianabased businesses investing in real estate or major equipment. Combine bank/conventional funds, CDC financing, and owner equity.

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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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.

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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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• Rates (2025): Fixed, ranging 6.25%–7.1%
• Down Payment: 10% (some start-ups: 15%)
• Terms: 10, 20, or 25 years

3. SBA Microloan Program

For startups or very small enterprises statewide needing up to $50,000. Numerous certified intermediaries exist across Indiana.

• Rates (2025): 7%–10.5%
• Repayment Terms: Up to 6 years
• Down Payment: Flexible

4. SBA Express Loans

Fast approval with loans up to 0,000 for working capital, equipment, or real estate. Indiana’s regional banks often feature 36-hour response times.

• Rates (2025): Prime + 4.5%–6.5%
• Terms: Up to 7 years

5. SBA Export Loan Programs

✅ 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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Hoosier exporters can access Export Express, Export Working Capital, and International Trade loans for $500,000–$5,000,000.

• Rates (2025): Prime + 2%–4.5%
• Flexibility: Working capital, contract fulfillment, expansion abroad.

Who Qualifies for SBA Loans in Indiana?

• For-profit businesses, legally registered in Indiana
• Meet SBA size standards
• Owner(s) with good credit (typically 650+ for 7(a)/504; higher preferred for startups and microloans)
• No recent bankruptcies or defaults on government debt
• Reasonable equity investment (at least 10% for real estate/acquisitions; as little as 5% for some microloans)
• Viable business plan with positive financial projections

✅ 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

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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

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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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Credit requirements: Most Indiana SBA lenders require at least a 650–680 FICO for general loans (7(a)/504). Startups may face stricter thresholds or require additional collateral.

How Indiana Businesses Use SBA Financing (2025 Focus: Business Acquisition)

In 2025, SBA loans have played a substantial role in succession planning and M&A, with many Indiana-based entrepreneurs securing funds to purchase existing businesses as retiring owners seek exit strategies.

• Franchise Resales: Fast-food franchises, fitness centers, and popular Indiana restaurant chains.
• Professional Services: CPA and dental practices, veterinary clinics.
• Mainstreet Businesses: Laundromats, salons, retail locations, manufacturing shops.

Step-by-Step SBA Loan Application Process in Indiana (2025)

1. Assess Needs & Loan Type: Decide on acquisition, working capital, or another use.
2. Select a Preferred SBA Lender: See Indiana options below.
3. Gather Documentation:
   • Personal and business tax returns (last 3 years)
   • Business financial statements & projections
   • Details on acquisition target (for business purchases)
   • Business plan
   • Owner resumes
   • Debt schedule & personal financial statement
4. Lender Review: Indiana SBA lenders will pre-qualify and may request additional details.
5. Conditional Commitment: If approved, receive an SBA loan offer outlining rates, terms, and conditions.
6. Underwriting & SBA Approval: Lender submits the package for SBA guarantee (Prime lenders in Indiana often receive expedited decisions).
7. Closing & Funding: After signing, funds are released—direct to the seller in acquisitions.

Top 5 SBA Preferred Lenders in Indiana (2025)

• Huntington National Bank (statewide) – #1 SBA lender in Indiana, strong with business acquisition and 7(a) loans.
• Old National Bank (Evansville, Indianapolis) – 7(a), 504, and Express SBA Preferred Lender; personalized service for acquisitions.
• Lake City Bank (northern Indiana) – Known for manufacturing and professional acquisition lending.
• First Merchants Bank (Muncie, Fort Wayne, Indianapolis) – SBA 7(a), 504, Express; specialty in equipment finance and larger acquisitions.
• Centier Bank (Merrillville, Gary, Valparaiso) – Regional SBA lending focus, fast closing for business purchases.

Always check with your local bank as more Indiana lenders—including Credit Unions—offer SBA products.

Success Stories: Real Indiana SBA Loan Examples

• Dental Practice Acquisition (Carmel, IN) – $785,000 SBA 7(a): Dr. Patel used Huntington National for a 90% LTV loan, acquiring a busy practice with minimal upfront capital. Key: 15-year term, 7.45% rate.
• Main Street Restaurant Purchase (South Bend, IN) – $325,000 SBA 7(a): The new owner leveraged a 7(a) loan from Old National to take over a popular Italian eatery. The deal included working capital, equipment, and real estate via a blended 7(a)/504 structure.
• HVAC Company Buyout (Evansville, IN) – $2.3M SBA 7(a): Partners used a First Merchants Bank 7(a) loan to buy out the retiring owner and invest in new equipment. 10% down, 10-year term.
• Childcare Franchise Startup (Fort Wayne, IN) – $48,000 Microloan: An aspiring entrepreneur secured an Indiana microloan to launch a licensed in-home daycare, covering licensing, supplies, and marketing.

Indiana SBA District Office & Local Resources

• SBA Indiana District Office: 8500 Keystone Crossing, Suite 400, Indianapolis, IN 46240. Website | (317) 226-7272
• Small Business Development Centers (ISBDC): 10 centers across Indiana for free consulting & business planning. Visit ISBDC
• Indiana SCORE Chapters: Free local business mentoring – Indianapolis, Evansville, South Bend, and more.

Indiana Economic Incentives for Small Businesses

The state offers many business-friendly tax credits, grant programs, and workforce training support—which can be combined with SBA financing in 2025.

• Hoosier Business Investment (HBI) Tax Credit: Offsets capital investment for job-creating businesses.
• Next Level Jobs Program: Workforce training funding for high-growth sectors.
• Indiana Venture Capital Investment Tax Credit: Boosts access to equity funding alongside SBA loans.
• Local city/county grants and incentives: Especially for downtown revitalization, minority/women-owned startups, and green energy initiatives.

Frequently Asked Questions about Indiana SBA Loans (2025)

How much down payment do I need for an SBA acquisition loan?

Most Indiana lenders require 10% down for business purchases; startups/pure asset sales may require 15–20%.

How fast can my deal close?

Standard 7(a) deals: 45–60 days. SBA Express: sometimes under 2 weeks. Preparation is key for speed.

Can I get SBA financing as a minority or female entrepreneur?

Yes, including special programs with local SBDCs, microloan intermediaries, and city/municipal support.

Ready to Apply? Next Steps for Indiana Entrepreneurs

1. Prepare your business plan & financials—use ISBDC & SCORE advisors for guidance.
2. Contact several Indiana SBA Preferred Lenders to compare specific rates and terms.
3. Explore state/local grant and incentive options to complement financing.
4. Engage with your local SBA District Office for support through every stage.

With the right Indiana SBA lender and business plan, your business acquisition or growth vision is within reach—no matter the scale. 2025 is poised for savvy small business buyers to succeed!

Get a No Obligation Quote Today.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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