SBA Loans in Indiana: Complete 2025 Guide for Small Businesses

The landscape for Indiana small businesses has never been more promising in 2025. Whether you’re launching a tech startup in Indianapolis, acquiring a manufacturing business in Fort Wayne, or purchasing commercial real estate in Evansville, Small Business Administration (SBA) loans offer critical financing opportunities with flexible terms, low down payments, and government-backed security. This comprehensive guide covers everything Indiana entrepreneurs need to know about securing SBA loans in 2025—including the latest programs, requirements, trusted lenders, local resources, and real-world success stories.

Why Choose SBA Loans in Indiana?

• Low Down Payments: As low as 10%—keep more capital in your business.
• Longer, Flexible Terms: Up to 25 years for real estate, 10 years for working capital or equipment.
• Competitive Interest Rates: SBA 7(a) and 504 rates remain below most conventional bank loans in 2025.
• Government-Backed Security: Make you a more attractive candidate to lenders.

Overview of SBA Loan Programs in Indiana

Indiana entrepreneurs can leverage a range of SBA loan products in 2025:

• SBA 7(a) Loans: Flexible loans up to $5 million for working capital, real estate, business acquisition, and refinancing.
• SBA 504 Loans: For purchasing or renovating owner-occupied commercial real estate and heavy equipment; up to $5.5 million with favorable rates.
• SBA Microloans: Up to $50,000 for startups and microbusinesses needing smaller capital injections.
• SBA Express Loans: Loans up to $500,000 with faster decisions and streamlined paperwork.
• SBA Export Loans: Financing Indiana’s expanding international businesses—up to $5 million for exporters.

2025 SBA Loan Rates, Terms, and Fees

• 7(a) Loan Rates: As of Q1 2025, variable rates typically range from Prime + 2.5% to Prime + 4.75% (Current Prime is 8.5%).
• 504 Loan Rates: Fixed rates now average 6.5%–7.2% for 20–25 year terms.
• Microloan Rates: Usually 8.75%–9.25%, set by nonprofit intermediaries.
• Typical Fees: SBA guarantee fees apply for loans above $500,000; packaging and closing costs may apply.

Who Qualifies for an SBA Loan in Indiana?

• For-profit business based in Indiana (must operate within the U.S.)
• Meet SBA size standards (usually <500 employees or $7.5M revenue, varies by sector)
• Owner equity investment: Typically 10%–20% for startups/business acquisitions
• Good personal credit (FICO 680+ preferred, but not always required)
• Solid business plan and financial projections
• No recent bankruptcies or defaults on federal loans
• Collateral may be required for certain loan types

Top SBA Preferred Lenders in Indiana (2025)

• Lake City Bank (Statewide): Renowned for fast decisions on 7(a), 504, and Express loans.
• Old National Bank (Indianapolis, statewide): Focus on business acquisitions and commercial real estate.
• Centier Bank (Merrillville, statewide): Expertise in equipment financing and SBA Microloans.
• Horizon Bank (Central & Northern Indiana): SBA Preferred Lender specializing in startups and expansions.
• Huntington National Bank (Statewide): Large SBA presence, express processing, and deep experience.

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

1. Determine the Right Loan Program: Define your financing need: startup, acquisition, working capital, equipment, or real estate.
2. Find a Local SBA Lender: Choose from the Indiana SBA Preferred Lenders above, or consult the SBA Indiana District Office for more options.
3. Prepare Documentation:
   • Business plan with detailed projections
   • Personal and business tax returns (3 years)
   • Financial statements (balance sheet, P&L)
   • Ownership & management resumes
   • Credit reports
   • Entity documents (LLC/Inc./Partnership agreements)
4. Complete Lender Application: Your lender will help prepare forms such as SBA Form 1919, lender paperwork, and personal financial statement (Form 413).
5. Lender Underwriting: The lender will evaluate your credit, collateral, cash flow, and experience. For 7(a) loans under $500,000, streamlined reviews are often available in 2025.
6. SBA Guarantee Processing: Bank submits your package for SBA approval (as a Preferred Lender, they may approve & issue loan in-house).
7. Loan Closing & Funding: You’ll review terms, sign documents, and receive funds—often within 30–45 days for most programs.

Success Stories: Indiana SBA Loans in Action

• Startup Financing: An Indianapolis-based tech entrepreneur secured a $197,000 SBA Microloan via Centier Bank to launch an AI-driven logistics app. The flexible 7-year term lets them scale hiring and marketing.
• Business Acquisition: In Fort Wayne, a family acquired a small HVAC business using a $1.8 million SBA 7(a) loan from Huntington Bank—covering 90% of the purchase price with just 10% down.
• Commercial Real Estate: A Evansville restaurant owner purchased a new property and kitchen equipment through a $2.6 million SBA 504 loan—resulting in fixed payments over 25 years at 6.6%.
• Working Capital: A Lafayette manufacturer tapped a $420,000 SBA Express Line of Credit from Lake City Bank to bridge supply chain delays and fulfill large orders.
• Equipment Financing: A South Bend craft brewery used a $75,000 SBA Microloan to acquire canning and refrigeration equipment, doubling their monthly output.

Indiana SBA District Office and Local Resources

• SBA Indiana District Office: 8500 Keystone Crossing, Suite 400, Indianapolis, IN 46240
  Email: indiana@sba.gov
  Phone: (317) 226-7272
• SCORE Indiana: Free business mentoring—indiana.score.org
• Indiana Small Business Development Center (ISBDC): Business planning, market research, and loan packaging—isbdc.org
• Local CDFIs: Flagship Enterprise Center and Community Investment Fund of Indiana for Microloans and underserved borrowers.

State-Specific Incentives & Economic Development Programs

The SBA isn’t the only resource for Indiana entrepreneurs. The Indiana Economic Development Corporation (IEDC) offers grants, tax credits, and investment incentives:

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.

Page 3 of 5

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.

Page 5 of 5

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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• EDGE Tax Credits: For companies adding new full-time jobs in Indiana.
• Next Level Jobs Indiana: Employer training reimbursements & workforce assistance.
• Industrial Development Grants: Infrastructure support for business expansions.
• Startup Indiana Grants and Angel Investment Credit: Catalyze new business formations and innovation statewide.

2025 Update: What’s New for SBA Loans in Indiana?

• Faster Processing: SBA Express and digital 7(a) loans now fund in as little as 10 days after approval for loans up to $500,000.
• Expanded Eligibility: Nonprofit childcare businesses, rural health clinics, and select agricultural enterprises now eligible for select SBA loan programs.
• Interest Rate Adjustments: 504 fixed rates remain significantly below conventional commercial terms despite rate hikes.
• Indiana Focus on Tech & Manufacturing: State is incentivizing technology adoption, advanced manufacturing, and environmental sustainability upgrades—often complementing SBA financing.

Frequently Asked Questions about Indiana SBA Loans

• What’s the minimum credit score for SBA loans in Indiana? – Lenders typically look for 680+, but some accept lower scores (620+) if strong collateral and cash flow are present.
• Can I get an SBA loan to buy an existing Indiana business? – Yes! 7(a) loans are ideal for business acquisitions, often requiring as little as 10%-15% down.
• Is there SBA financing for startups? – Absolutely. 7(a) loans and Microloans are viable for Indiana startups with detailed business plans and solid projections.
• How long does it take to get funded? – 7(a) Express loans as fast as 10-15 days; standard SBA funding is typically 30–45 days from a complete application.
• Can I use an SBA loan for franchise funding? – Yes, many franchise brands are SBA-eligible. Check the SBA Franchise Directory.

Start Your SBA Loan Journey in Indiana

SBA loans unlock opportunities for entrepreneurs from Gary down to Jeffersonville. By leveraging flexible SBA financing, Indiana business owners can invest in growth, weather economic headwinds, and create jobs across the Hoosier State. Work with an experienced Indiana SBA lender and the helpful resources above to accelerate your business dreams in 2025.

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✅ 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.

Page 3 of 5

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%

Page 4 of 5

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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✅ 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

Page 2 of 3

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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GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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

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