SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

The Small Business Administration (SBA) empowers entrepreneurs across Indiana by providing flexible loan programs designed to help companies start, expand, or manage cash flow. Whether you’re launching a new venture in Indianapolis, purchasing equipment in Evansville, or acquiring a business in Fort Wayne, this comprehensive 2025 guide covers everything Hoosier State entrepreneurs need to know about SBA financing—including loan types, qualifying criteria, application steps, top local lenders, and state-specific support programs.

2025 SBA Loan Programs Available in Indiana

The SBA does not lend directly but partners with preferred lenders in Indiana to offer loans at competitive terms. Here’s a breakdown of the main SBA programs available in 2025:

• SBA 7(a) Loan Program
  This flagship program is ideal for financing startups, purchasing businesses, working capital, buying equipment, or even acquiring real estate. Maximum amounts up to $5 million with repayment terms up to 25 years for real estate and 10 years for other uses.
• SBA 504 Loan Program
  Perfect for Indiana businesses buying or renovating commercial real estate or equipment. 504 loans offer long-term, fixed-rate financing with up to 90% loan-to-cost ratios, up to $5.5 million for standard projects.
• SBA Microloans
  For smaller financing needs—startups or microbusinesses can borrow up to $50,000 for working capital or inventory, with shorter terms (typically up to 6 years) and flexible use of funds.
• SBA Express Loans
  Speed up funding ($500,000 max in 2025) with streamlined approvals and quicker access—great for urgent working capital or small acquisitions.
• SBA Export Loans
  Enhance Indiana’s export-oriented businesses with up to $5 million for working capital, export development, foreign receivables, and international growth.

Top 2025 SBA Preferred Lenders in Indiana

Work with Indiana lenders who understand local business needs and have preferred SBA status, offering efficient approvals:

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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• Old National Bank – Premier SBA lender with branches statewide and deep Indiana roots.
• Fifth Third Bank – Strong regional presence, excelling in both 7(a) and 504 lending.
• Lake City Bank – Known for supporting Hoosier businesses with hands-on service and competitive rates.
• First Merchants Bank – Specialized teams assist with business acquisitions and commercial real estate projects.
• Horizon Bank – Focuses on small and midsize business growth with quick response times and flexible SBA solutions.

Indiana SBA Loan Qualification Criteria (2025)

• Businesses must be for-profit and located/operating within Indiana.
• Applicant must be a U.S. citizen or permanent legal resident.
• Owners must demonstrate good character, no recent bankruptcies or major tax delinquencies.
• Business size can’t exceed SBA small business standards (usually under 500 employees or below $15 million in annual revenue, dependent on industry).
• Credit Score: 680+ preferred (some microloans possible with 650).
• Down Payment: Typically 10% for 7(a) and 504 loans; may vary by use.
• Collateral: Often required for loans over $25,000, varies with loan amount and lender policy.
• Experience: For startups, relevant business/industry experience strengthens your application.
• Viable business plan and realistic financial projections

SBA Loan Purposes: Focus on Business Acquisition (2025 Highlight)

Indiana’s 2025 SBA lending landscape sees strong activity in business acquisition loans: Whether you’re taking over an existing restaurant in Terre Haute, a manufacturing firm in South Bend, or a successful franchise, the SBA 7(a) and 504 programs enable buyers to:

• Access up to 90% financing of purchase price for qualifying businesses
• Use longer repayment terms to manage cash flow (up to 10 years for acquisition)
• Wrap working capital and inventory needs into the loan
• Take advantage of government guarantees, reducing lender risk and increasing your approval odds

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

1. Evaluate your needs: Clarify if you’re buying a business, starting up, or refinancing debt; determine exact funding needs.
2. Select the right program: Discuss options with a preferred lender (see above) to choose 7(a), 504, microloan, or other SBA product.
3. Document preparation:
   • Business plan (especially for startups or acquisitions)
   • 3 years of business and personal tax returns (if applicable)
   • Personal financial statement and resume for owners
   • Copy of purchase agreement (for acquisitions)
   • Interim financials (balance sheet, P&L, AR/AP reports)
   • Projection statements (first 1-3 years)
   • Ownership and affiliation documentation
4. Submit your application: Your lender will work with you to complete SBA forms (Form 1919, etc.).
5. Lender/SBA review: Lenders underwrite and submit to SBA for guarantee approval. Express loans can be approved in days; standard loans may take 30-60 days.
6. Closing and funding: Upon approval, loan documents are executed, and funds are disbursed—either as lump sum or as needed, depending on your project.

Success Stories: SBA Loans in Action Across Indiana

Benefits of Indiana SBA Loans in 2025

• Lower down payments (as low as 10%, sometimes less with additional equity)
• Longer repayment terms (10-25 years) improving cash flow
• Competitive, often below-market rates (typically PRIME + 2-3% in 2025)
• Flexible use of proceeds — acquisition, real estate, working capital, equipment, refinancing
• Government-backed guarantees (up to 85%), making approval more likely for strong candidates
• Easier qualification criteria compared to many traditional bank loans

Indiana State-Specific Small Business Incentives (2025)

• Indiana Economic Development Corporation (IEDC) – Offers performance-based tax credits, workforce training grants, and small business support programs
• Next Level Jobs – Funding for workforce development, employer training reimbursements
• Hoosier Business Investment Tax Credit – Encourages capital investment and job creation
• Local Revolving Loan Funds (RLFs) – Complementary financing for startups and expansions, often used alongside SBA funds

Indiana SBA District Office: Local Resources & Contacts

The SBA Indiana District Office is a vital partner for small businesses. They offer free consultations, training, and referrals:

• Address: 8500 Keystone Crossing, Suite 400, Indianapolis, IN 46240
• Phone: (317) 226-7272
• Email: indiana@sba.gov
• SBA Indiana District Office Website

✅ 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 small business owners can also access the Service Corps of Retired Executives (SCORE), Small Business Development Centers (SBDCs), and Women’s Business Centers for personalized business advice and assistance preparing SBA loan applications.

2025 Market Context & Program Updates

• SBA maximum Express loan amount remains $500,000 for 2025.
• 7(a) and 504 programs both offer up to $5 million; limits may be higher for select manufacturing projects (504: up to $5.5 million).
• Interest rates in 2025 remain competitive—ranging from 9% to 11% APR based on loan program and risk, well below many private alternatives.
• Expedited reviews for veteran-owned and underserved Indiana businesses.
• Digital applications now standard with most preferred lenders; faster turnarounds expected compared to prior years.

Get Started with Your Indiana SBA Loan 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

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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Whether you’re buying an established company or taking your startup idea to the next level, Indiana’s SBA loan programs make it easier than ever in 2025. Connect with a preferred lender, use local resources, and tap into state incentives to fuel your small business journey. Contact your SBA district office or lender today to discuss how an SBA loan can turn your Indiana business vision into reality!

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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