SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

Indiana boasts a dynamic small business environment, from advanced manufacturing to agri-business and services. If you're an entrepreneur or business owner in the Hoosier State looking to finance a startup, expand operations, purchase real estate, or acquire equipment, SBA loans in Indiana for 2025 offer versatile, attractive options. This authoritative guide provides everything you need to know about Indiana SBA financing—including loan types, current rates, how to qualify, top lenders, and local support resources.

Why Choose SBA Loans in Indiana?

• Lower Down Payments: SBA loans often require as little as 10% down, preserving your working capital.
• Long Repayment Terms: Up to 25 years for real estate and 10+ years for most other uses.
• Competitive Interest Rates: Backed by the federal government for reduced risk and better rates.
• Flexible Uses: Startup costs, business acquisitions, working capital, equipment purchases, or owner-occupied commercial real estate.

Indiana Market Outlook for 2025

Indiana continues its upward trajectory for small business growth in 2025, especially in emerging sectors such as logistics, manufacturing, agriculture, and technology startups. SBA loan programs offer a critical tool for fueling this growth, with billions allocated for new lending this year. Indiana’s statewide economic development initiatives—like the Indiana Small Business Development Center, Next Level Fund, and local tax abatements—further incentivize entrepreneurship and expansion.

Types of SBA Loans Available in Indiana

1. SBA 7(a) Loan Program

The 7(a) loan is the SBA’s most popular, offering up to $5 million for:

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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• Business acquisition or startup financing (2025 Focus)
• Working capital and inventory
• Tenant improvements
• Purchase of equipment or owner-occupied real estate

Key 2025 updates: Interest rates (March 2025): Prime + 2.75%–4.75%. Up to 10 years for most uses, up to 25 years for real estate.

2. SBA 504 Loan Program

Designed for commercial real estate or heavy equipment purchases, the 504 loan offers:

• Fixed rates (around 6.25%–6.5% in early 2025)
• 25-year amortization for real estate
• Requires as little as 10% down (may be higher for startups or special property types)

3. SBA Microloan Program

✅ 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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For smaller financing needs, the microloan program offers up to ,000 for startups, equipment, working capital, or inventory. Indiana nonprofits like Flagship Enterprise Center and Community Action of Northeast Indiana actively participate.

4. SBA Express Loans

✅ 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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SBA Express loans offer streamlined approval for amounts up to 0,000. Indiana business owners benefit from quick decisions (24–72 hours) and flexible terms. Interest rates are capped by the SBA, typically slightly higher than standard 7(a) loans.

5. SBA Export Loans

If your Indiana business is exporting products or services, specialized SBA Export Working Capital and Export Express loans can finance international expansion up to million, supporting the state’s growing global trade sector.

2025 Qualification & Eligibility Criteria

• Business Location: Physically located and operating in Indiana
• Size Standards: Meet SBA small business size standards (based on NAICS code & employees/revenue)
• Credit Score: Minimum 650 FICO for most programs (680+ preferred by lenders for 7(a) and 504)
• Time in Business: Startups eligible; established businesses (2+ years) qualify for best rates
• Owner Equity: Must personally invest and show ability to repay
• No recent bankruptcies or felony convictions; current on all government debts

How Much Down Payment Do I Need?

• 7(a): 10%–20% for startup financing, business acquisition, or real estate buy
• 504: 10%–20%, depending on use and business age/type
• Express/Microloans: Sometimes 0–10% depending on lender

5 Top SBA Preferred Lenders in Indiana (2025)

1. Horizon Bank – Consistently ranked Indiana’s leading SBA 7(a) lender; strong for business acquisitions and CRE
2. Old National Bank – Wide experience with 7(a), 504, and express loans for startups and expansions
3. First Internet Bank of Indiana – Online-driven national leader in SBA lending, headquartered in Fishers, IN
4. Centier Bank – Statewide SBA lending; especially active in northern Indiana communities
5. KeyBank – Regional SBA Preferred Lender with strong Indiana presence, robust startup financing options

Step-by-Step SBA Loan Application Process

1. Consult with a business advisor. Engage your local Indiana SBDC or talk directly with an SBA preferred lender.
2. Prepare documentation. Typical requirements include:
   • Business plan (especially for startups/acquisitions)
   • 3 years personal/business tax returns
   • Interim statements and cash flow projections
   • Personal financial statement and resume
   • Purchase agreements (for business acquisition)
3. Complete the SBA application. Your lender will provide SBA Form 1919 & supporting schedules.
4. Loan underwriting & approval. Underwriters evaluate credit, collateral, business viability, owner experience.
5. Conditional commitment & loan closing. Finalize all documentation; funds are disbursed for approved uses.

Indiana SBA Loan Success Stories

• Startup Restaurant in Indianapolis: Secured a $230,000 SBA 7(a) loan via Horizon Bank to launch a fast-casual concept, covering leasehold improvements, equipment, and opening inventory.
• Manufacturing Acquisition in Fort Wayne: Local entrepreneur utilized $1.2M from Old National Bank for a business acquisition with only 15% down. Used 8-year amortization for affordable monthly payments.
• Commercial Real Estate Purchase in Evansville: Service provider expanded with a $780,000 SBA 504 loan (First Internet Bank). Locked in a 25-year fixed rate under 6.5%, just 10% down.
• Microloan Success in Bloomington: A boutique cake shop accessed a $48,000 microloan via Flagship Enterprise Center, funding kitchen upgrades and workforce expansion.

Indiana SBA District Office & Local Resources

• SBA Indiana District Office:
  8500 Keystone Crossing, Suite 400, Indianapolis, IN 46240
  Phone: (317) 226-7272
  Website: SBA Indiana District
• Indiana Small Business Development Center (ISBDC): Free counseling, business planning, and grant/loan assistance. ISBDC
• Local SCORE Chapters: Volunteer mentoring & workshops. Find your local chapter at SCORE Indianapolis

Indiana-Specific Incentives & Programs (2025)

• Next Level Fund: State-backed venture and small business capital initiatives
• EDGE Tax Credit: For businesses creating new jobs in Indiana
• Certified Tech Parks: Incentives and infrastructure for tech startups
• Local tax abatements for industrial and commercial expansion

Frequently Asked Questions about SBA Loans in Indiana

Can startups get an SBA loan in Indiana?

Yes—especially with the 7(a) and microloan programs! Be ready to provide a strong business plan and 10–20% owner equity.

What credit score do I need?

Minimum 650; many lenders prefer 680+ for optimal rates and approval terms.

How long does it take to get an SBA loan?

Express and microloans can fund within 2–4 weeks; 7(a) and 504 loans usually close within 30–60 days.

Are there special programs for rural Indiana businesses?

Yes—look into specialized USDA/SBA collaborations and local lender programs for rural entrepreneurs.

Ready to Apply for an SBA Loan in Indiana?

2025 is an excellent year for Indiana small businesses to access growth capital. Whether you’re starting up, acquiring a business, or purchasing real estate or equipment, Indiana’s SBA lending ecosystem is robust and well-supported. Connect with a local SBA-preferred lender, your Indiana SBDC, or the SBA District Office in Indianapolis to begin your journey!

Get a No Obligation Quote Today.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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