SBA Loans in Indiana for Small Business in 2025 Now

SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

Small businesses are the engine of Indiana’s economy, from high-tech firms in Indianapolis and Biotech companies in Bloomington to Main Street retailers in Evansville. In 2025, access to affordable financing is more crucial than ever as businesses seek to expand, recover, or launch. SBA loans remain one of the most attractive options for Indiana entrepreneurs due to their flexible terms, low down payments, and competitive rates. This comprehensive guide covers everything you need to know about obtaining an SBA loan in Indiana in 2025, including loan types, eligibility, area-specific lenders, and success strategies for Hoosier businesses.

Why Choose SBA Loans in Indiana?

• Low down payments: Typically 10% or lower, easing startup and growth costs
• Government-backed: Reduces bank risk, making financing more accessible
• Longer repayment terms: Stretch payments over 7-25 years, improving cash flow
• Competitive fixed/variable rates: Often lower than conventional loans in 2025 (6.25%-8.75% range)
• Wide use of funds: Including startups, working capital, equipment, real estate, acquisitions, and exports

2025 SBA Loan Programs Available in Indiana

• SBA 7(a) Loans – Versatile, up to $5M. Use for working capital, startups, equipment, business acquisition, debt refinance.
• SBA 504 Loans – Up to $5.5M, ideal for commercial real estate purchases, expansions, and equipment financing.
• SBA Microloans – Up to $50,000 for startups, home-based, and underserved businesses.
• SBA Express Loans – Up to $500,000 for urgent working capital needs with fast turnaround.
• SBA Export Loans – Help Indiana businesses access international markets.

SBA 7(a) Loans: Indiana’s Most Popular Option for Business Acquisition

Focus for Indiana 2025: Business Acquisition

The SBA 7(a) program is the leading choice for Indiana entrepreneurs looking to purchase existing businesses. Whether buying a family-owned restaurant in Fort Wayne or acquiring a manufacturing firm in Gary, the 7(a) offers flexible use and terms tailored for business transitions.

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 Amount: Up to $5 million
• Terms: Up to 10 years for acquisitions, 25 years for real estate
• Interest Rates (2025): Prime + 2.75%-4.5% (approx. 7.75%-9.5% typical)
• Down Payment (For Acquisitions): 10% of purchase price (can be partially seller-financed)

Qualifications:

• Business or acquisition must operate in Indiana (or main revenue within the state)
• Minimum 2 years of profitable operations for acquired business
• Buyers typically need FICO 680+
• 10%-20% buyer equity injection
• Personal guarantees from owners with 20%+ stake

SBA 504 Loans: For Commercial Real Estate & Equipment

• Loan Amount: Up to $5.5 million (up to 90% LTV financing)
• Terms: 10, 20, or 25 years
• Fixed Rates (2025): 6.15%-7.1% typical
• Down Payment: Generally 10% for most projects

The SBA 504 is favored by Indiana manufacturers, warehouses, logistics hubs, and medical practices aiming to purchase or build facilities. It’s also ideal for heavy equipment financing.

SBA Microloans: Launching Indiana Startups

• Loan Amount: Up to $50,000 ($14,000 average in Indiana, 2025)
• Terms: Up to 7 years
• Rates: 7.5%-9.0% typical in 2025

Nonprofit lenders provide microloans to Indiana startups, women-, and minority-owned businesses, and rural ventures. Use funds for supplies, working capital, inventory, or equipment.

SBA Express Loans: Faster Access for Hoosier Businesses

• Loan Amount: Up to $500,000
• Approval Time: As quick as 36 hours
• Terms: 7 years for lines of credit; up to 10 years for term loans
• Interest Rates: Prime + 4.5%-6.5%

✅ 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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Suited for urgent working capital needs—restaurant inventory, payroll, or equipment repairs.

SBA Export 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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Indiana exporters can use SBA export programs for international working capital, receivable financing, and contract fulfillment. Loans up to $5 million are available for eligible businesses engaged in foreign sales.

Indiana SBA Preferred Lenders in 2025

These experienced Indiana lenders expedite SBA approvals and understand local business dynamics:

• Old National Bank (Evansville) – Leading SBA lender with state-focused staff; specializes in acquisition and CRE deals.
• Lake City Bank (Warsaw) – Renowned for manufacturing, healthcare, and agri-business lending.
• 1st Source Bank (South Bend) – Excellent for SBA 7(a) and 504 loans, business banking relationships.
• Horizon Bank (Michigan City) – Strong SBA Preferred Lender with expedited decision-making.
• PNC Bank (Statewide) – National lender with streamlined SBA process, digital applications, and wide product suite.

How to Get an SBA Loan in Indiana: Step-by-Step

1. Assess Your Needs: Define how much you need (by type: acquisition, real estate, working capital, startup) and intended use of funds.
2. Check Eligibility: Indiana businesses must be for-profit, under SBA size limits, and demonstrate repayment ability. Owners should have minimum 10%-20% equity for acquisition/real estate.
3. Prepare Documents:
   • Business plan & financial projections
   • 3 years tax returns (personal and business, if existing)
   • Purchase agreement (for acquisitions)
   • Personal financial statement (SBA Form 413)
   • Credit reports (FICO 650 or higher preferred)
   • Organizational documents (EIN, articles, licenses)
   • Collateral documentation (if applicable)
4. Select a Preferred Lender: Contact local Indiana SBA PLP lenders for prequalification and review their criteria.
5. Apply: Fill out SBA loan application forms, provide required documentation, and work with your lender on underwriting. Most lenders offer online portals.
6. Lender Review & Decision: Lender reviews the file, may request additional details, and submits to SBA (if not delegated). Approval can take 1-6 weeks.
7. Closing & Funding: Sign loan documents, fulfill closing requirements, and receive funding—typically via wire to your business or seller’s account.

Success Stories: Indiana Businesses Using SBA Loans in 2025

• Indianapolis HVAC Company Acquisition ($450,000; 7(a) Loan):
  A technician bought out his retiring employer with just 10% down and kept 7 employees on payroll. The 10-year term and 7.95% fixed rate made monthly payments manageable through service revenue.
• Fort Wayne Artisan Bakery Start-Up ($38,000; Microloan):
  Two co-founders leveraged a microloan from the Flagship Enterprise Center to launch a bakery, buy ovens, and cover initial marketing—repayable in 6 years at 8.15%.
• Bloomington Dental Practice Real Estate Expansion ($1.1M; 504 Loan):
  A growing dentist used the Indiana Statewide CDC and Lake City Bank to move into a new 6,500 sq. ft. building, financing 90% LTV with a 25-year term and a 6.3% fixed rate.
• Lafayette Furniture Exporter ($750,000; SBA Export Express):
  This company utilized Export Express financing for inventory and shipping to new Canadian clients, protecting their cash flow and expanding sales abroad.

Indiana SBA District Office & State Resources

Indiana District Office (Indianapolis):
8500 Keystone Crossing, Suite 400
Indianapolis, IN 46240
Official site | Phone: (317) 226-7272

Services include workshops, business plan development, lender match, export counseling, Women’s Business Centers, SCORE, and SBDC support statewide (Evansville, Gary, Fort Wayne, South Bend, Terre Haute).

Indiana Business Incentives & Development Programs (2025)

• Indiana Economic Development Corporation (IEDC): Offers tax credits, workforce training grants, and site selection help. See iedc.in.gov
• Next Level Jobs: Grant program upskilling Indiana workers, reimbursing select training expenses for employers.
• EDGE Tax Credit: For job-creating small businesses increasing payroll.
• Venture Capital Investment Tax Credit: For attracting investor funds to Indiana startups.

Conclusion: Take the Next Step with SBA Financing in Indiana

Whether you’re acquiring a local company, buying commercial property, or launching your dream startup, SBA loans continue to empower Indiana business owners. By leveraging Indiana’s robust lending network, generous state incentive programs, and the security of SBA guarantees, Hoosier entrepreneurs can thrive in 2025 and beyond. Start by connecting with a local Preferred Lender or the Indiana SBA District Office to explore your best options.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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

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