SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

Indiana’s entrepreneurial spirit is thriving in 2025, with thousands of small businesses powering the state’s diverse economy. Whether you’re a startup founder in Indianapolis, a manufacturer in Fort Wayne, or a Main Street retailer in Evansville, Small Business Administration (SBA) loans remain the gold standard for affordable, long-term business financing in Indiana. This guide details everything Hoosier entrepreneurs need to know about securing SBA loans in 2025, including loan options, lender recommendations, and tips for a successful application.

Why Choose an SBA Loan in Indiana?

• Lower Down Payments: As little as 0–10% down for most programs.
• Flexible Repayment Terms: Up to 25 years for real estate, 10 years for equipment, and working capital.
• Competitive Interest Rates: Government-backed, with 2025 rates currently 2–3% below standard commercial loans.
• Broad Use of Funds: Startup costs, expansion, equipment purchase, real estate, acquisitions, and more.
• Strong Support: Local SBA offices and resource partners throughout Indiana.

2025 SBA Loan Options for Indiana Businesses

1. SBA 7(a) Loan Program

The most popular and versatile SBA loan, 7(a) loans go up to million and can be used for startup financing, working capital, buying equipment, or acquiring an existing business.

• Loan Amounts: Up to $5 million
• Terms: Up to 10 years (working capital, equipment), up to 25 years (real estate)
• Typical Rates: Prime + 2.75–3.75% (2025 average: 8.25%–9.25%)
• Down Payment: 10%, though startups might require up to 20%
• Approval Time: 2–6 weeks

2. SBA 504 Loan Program (CDC/504)

The 504 program is perfect for Indiana companies looking to buy, build, or upgrade commercial real estate or purchase heavy equipment.

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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• Loan Amounts: $125,000 to $5.5 million
• Terms: 10, 20, or 25 years
• Interest Rates: Fixed, typically 5.5–7.0% in 2025
• Down Payment: 10% (up to 15% if specialized property or new business)
• Structure: 50% bank, 40% CDC (Certified Development Company), 10% borrower

3. SBA Microloan Program

For startups and small businesses with modest funding needs, SBA microloans are available up to $50,000, ideal for working capital, inventory, and initial expenses.

• Loan Amounts: $5,000 to $50,000
• Terms: Up to 7 years
• Interest Rates: Typically 7–9% in 2025
• Down Payment: Varies, but often 0–10%

4. SBA Express Loans

SBA Express loans provide streamlined approvals of up to 0,000, perfect for businesses that need working capital or equipment financing fast.

• Loan Amounts: Up to $500,000
• Approval Time: As little as 36 hours for lender review
• Terms & Rates: 7-year term; Prime + 4.5–6.5%

5. Export-Specific SBA 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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Indiana exporters can access International Trade Loans, Export Express, and Export Working Capital, providing up to $5 million and special rates for global growth.

2025 Qualification Criteria for Indiana SBA Loans

• Credit Score: Minimum 670 for 7(a)/504/Express; 620+ for microloans
• Time in Business: Flexible—startups welcome for 7(a), microloans; 2+ years helps for others
• Business Type: For-profit, operating in Indiana
• Annual Revenue: Below SBA size standards (usually <$8–$35 million, varies by industry)
• Personal Guarantee: Required from 20%+ owners
• Collateral: Required for loans over $50,000—but flexibility exists
• Down Payment: 10% for most programs

Top Indiana SBA Preferred Lenders (PLPs) in 2025

✅ 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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Several lenders are authorized by the SBA to fast-track approvals. In 2025, the following banks lead Indiana SBA lending:

• Fifth Third Bank
• Old National Bank
• Huntington National Bank
• Lake City Bank
• Regions Bank

Step-by-Step: How to Apply for an SBA Loan in Indiana (2025)

1. Assess Your Financing Needs
   Estimate how much you need, what you’ll use it for, and which SBA program best fits.
2. Check Eligibility
   Review the qualification criteria above. Consider your credit, down payment, and business stage.
3. Prepare Documentation
   • Business plan and financial projections
   • Personal and business tax returns (2–3 years)
   • Personal financial statement
   • Business debt schedule
   • Legal documents (articles of incorporation, leases, etc.)
4. Choose an Indiana SBA Preferred Lender
   Connect with one of the recommended banks above. Some accept online applications.
5. Application Submission
   Complete the application forms (SBA Form 1919 for 7(a), Form 1244 for 504, etc.). Work closely with your lender to answer questions.
6. Lender & SBA Review
   Lender reviews your application; most can approve without waiting on SBA head office. For larger or complex loans, SBA will directly review.
7. Approval & Closing
   Upon approval, you’ll receive a commitment letter. Closing involves signing documents, showing you have the required equity, and finalizing collateral.

Indiana SBA Loan Success Stories

• Sage Roots Early Learning, Bloomington: In 2024, this childcare startup secured a $135,000 SBA 7(a) loan from Old National Bank, supporting furniture, renovations, and working capital. Today, Sage Roots employs 18 staff and cares for over 70 children.
• Pioneer Machining, Fort Wayne: With a $2.75 million SBA 504 loan through Lake City Bank and Northeast Indiana CDC, this manufacturing company purchased a 35,000-square-foot facility, boosting production capacity by 60% and adding 23 jobs.
• Hoosier Blend Café, Indianapolis: A veteran-owned business acquired an existing coffee shop with a $368,000 SBA 7(a) loan from Huntington Bank, enabling local job retention and expanding menu offerings.
• Rural Roots Farm, Terre Haute: With a $28,000 microloan from the Indiana Small Business Development Center partner, this startup diversified into organic produce and direct-to-consumer sales.

Indiana SBA District Office & Resources

The SBA Indiana District Office is your local hub for training, free counseling, and support. Their staff knows the Hoosier small business landscape and can help connect you with the right resources.

• Location: 8500 Keystone Crossing, Suite 400, Indianapolis, IN 46240
• Phone: (317) 226-7272
• Website: SBA Indiana District Office

Contact your local Small Business Development Center (SBDC), SCORE chapter, or the Women’s Business Center for additional support with your loan application and business plan.

Indiana-Specific Business Incentives & Economic Development

• Next Level Jobs Indiana: Grants for workforce training and technology development.
• EDGE Tax Credits: Incentives for businesses creating new jobs in Indiana.
• Regional Economic Acceleration and Development Initiative (READI): Matching funds for business expansion projects.
• Indiana Economic Development Corporation (IEDC):

Many SBA lenders and CDCs work closely with local and state programs for gap financing, larger projects, or additional incentives for business growth.

2025 SBA Loan Program Updates

• Streamlined SBA Express: Higher caps ($500K), simpler application as of 2025.
• Fee Reductions: Waived or reduced guarantee fees for loans under $500K (subject to annual appropriations).
• Equity Flexibility for Startups: More lenient equity requirements for tech and innovation startups.
• Increased Maximum 504 Loan Amounts: Now $5.5 million for eligible businesses and projects, encouraging larger real estate developments.

Ready to Grow Your Indiana Business?

From small startups to expanding manufacturers, Indiana SBA loans remain the most flexible, affordable financing option for virtually every type of entrepreneur. Connect with a local lender, build a strong application, and tap into the Hoosier State’s unique business resources to achieve your 2025 goals.

Frequently Asked Questions

Can Indiana startups get SBA loans?

Yes! Many lenders welcome startups, especially for 7(a) and microloans. Prepare a strong business plan and be ready for a higher down payment.

What is the current SBA loan interest rate in 2025?

Rates range from around 8.25%–9.25% for 7(a) loans and 5.5%–7% fixed for 504 loans, varying with market conditions.

How long does it take to get an SBA loan?

Most loans close within 2–6 weeks, faster for Express and microloans.

Who should I contact first?

Reach out to an Indiana SBA Preferred Lender or the SBA Indiana District Office for guidance.

Get a No Obligation Quote Today.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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