SBA 7(a) for distributors: the cheapest capital you can get, if you have the time.
Dockdoor Capital packages SBA 7(a) and SBA Express files for wholesalers, distributors and importers and places them with our SBA-preferred bank partners. $50,000 to $5,000,000, 10% down, up to 10 years on working capital and 25 years on real estate, with a 680 minimum FICO and 24 months in business. SBA Express closes in 10 to 21 days; a standard 7(a) in 30 to 45.
What are the criteria?
SBA 7(a) / SBA Express — criteria
- Amount
- $50,000 – $5,000,000 (SBA Express capped at $500,000)
- Term
- Up to 10 years working capital, fleet and fixtures; up to 25 years on owner-occupied real estate
- Down payment
- 10% on an acquisition or a start-up with experience
- Minimum credit score
- 680
- Minimum time in business
- 24 months (start-ups considered with industry experience and a 20%+ injection)
- Documents
- 3 years business + personal tax returns, YTD P&L and balance sheet, debt schedule, A/R and inventory summary, SBA Form 1919/1920, business plan and projections for an acquisition
- Collateral
- Available business assets; real estate pledged if the loan is real-estate-secured. Personal guarantee from all 20%+ owners.
- Uses allowed
- Working capital and inventory, trucks and material handling, leasehold improvements, business acquisition, partner buyout, refinance of qualifying business debt, owner-occupied warehouse real estate
- Uses not allowed
- Paying off a merchant cash advance is generally not an eligible refinance use. Ask us before you plan around it.
- Timeline
- SBA Express 10 – 21 days · Standard 7(a) 30 – 45 days
- Path
- Packaged by Dockdoor Capital, placed with SBA-preferred bank partners. Dockdoor does not underwrite SBA credit in-house.
SBA 7(a) and SBA Express are packaged by Dockdoor Capital and placed with SBA-preferred bank partners. See disclosures.
Why does SBA fit a distribution business so well?
Wholesale and distribution is asset-heavy and margin-thin. That is exactly the profile a long, cheap amortizing loan is built for.
The term matches the asset.
A warehouse lease, racking, a cooler box and a fleet all have working lives measured in years. Ten years on working capital and fixtures, and 25 on real estate, means the payment is sized to the asset rather than to one buying season.
Thin margins need a low payment.
Distribution runs on volume and a few points of margin. A ten-year payment on the same dollars is a fraction of a twelve-month advance, which is the difference between a profitable month and a tight one.
Acquisitions and buyouts are explicitly eligible.
Buying a retiring competitor’s routes, taking out a partner, or buying the building you already distribute from are named 7(a) uses. The SBA will finance the goodwill in the purchase price, which a bank term loan usually will not.
Inventory counts as working capital.
Permanent working capital to carry a bigger inventory position and longer customer terms is an eligible use. For a distributor that has outgrown its supplier credit, that is often the whole point of the loan.
Is SBA actually right for you?
SBA is right if
You’re buying a competitor, a second warehouse or the building you’re in, you have 680+ credit and two years of filed returns, you can put 10% down, and you can wait 30 to 45 days.
The payment on a 10-year SBA loan is a fraction of a 12-month advance for the same money.
SBA is wrong if
The container releases Thursday, the supplier’s price expires Friday, or your credit is in the 500s. That is what working capital and factoring exist for.
We will tell you this on the phone rather than let you spend three weeks assembling a package that was never going to close.
Buying a route, a book or a building
Distribution changes hands quietly: a retiring owner sells the accounts, the trucks and the warehouse lease to the person who has been running the Tuesday route for ten years. SBA 7(a) is built for that transaction. It finances the purchase price including goodwill, the working capital to carry the acquired receivables, and the vehicles that come with the deal, with 10% down.
Tell us the structure before the file is built — asset purchase or stock purchase, whether real estate is included, whether the seller will carry a note. Each one changes what the bank partner needs and how long it takes.
Who funds an SBA loan at Dockdoor. SBA 7(a) and SBA Express files are packaged by Dockdoor Capital and placed with SBA-preferred bank partners. Dockdoor does not make SBA credit decisions and does not underwrite SBA credit in-house. The partner is identified to you in writing before you sign.
Working capital, lines of credit and factoring are underwritten and funded in-house. See disclosures.
What a distributor needs to qualify.
Every number below is a real criterion. If you clear these, apply. If you don’t, call us and we’ll tell you what would change it.
| Minimum monthly revenue | $15,000 in business bank deposits |
|---|---|
| Minimum time in business | 6 months |
| Minimum credit score | None for working capital or factoring. 600+ for a line of credit. 650+ for a term loan. 680+ for SBA. |
| Funding range | $10,000 to $2,000,000 for working capital. Up to $5,000,000 for term loans, SBA, and factoring facilities. |
| Time to a real offer | About 4 business hours on a complete file. |
| Time to funding | 24 hours. Same day if a clean file is signed before 11:00 AM ET. |
| Documents required | Application plus your 3 most recent months of business bank statements. 4 months if your business is seasonal. Factoring adds your A/R aging and sample invoices. |
| Contract length | 2 pages. |
| Repayment | Fixed daily or weekly ACH from your operating account. No split funding. No holdback percentage. No lockbox. |
| Prepayment discount | Up to 30% off the remaining cost of funding when a working capital advance is paid off within the first 30, 60, or 90 days. |
| Receivables on terms | Factorable. Net-30 to net-90 invoices owed by grocery chains, convenience stores, food-service operators, institutions and other business accounts. Up to 90% advanced. |
| Supplier deposits, containers & duty | Approved uses. Purchase orders, supplier deposits, landed cost, customs duty and freight are what working capital and a line of credit are for here. |
| Business types approved | Broadline and specialty food-service distributors, produce, meat and seafood wholesalers, beverage distributors, importers and container buyers, grocery and convenience wholesalers, cash-and-carry warehouses, packaging and disposables suppliers, frozen and cold-chain distributors, DSD route distributors, smallwares dealers, industrial and MRO wholesalers, building-materials supply, e-commerce and marketplace wholesalers, apparel and general-merchandise wholesalers. |
| Not required | Collateral for working capital. A business plan. Tax returns under $500,000. A warehouse you own. A minimum SKU count or customer count. Domestic-only sourcing. |
| Open to | U.S. businesses with a U.S. business bank account. All 50 states. |
Four minutes. Three bank statements. No credit impact to apply.
SBA questions, answered.
Can I use an SBA loan to buy a distribution business?
Yes. Business acquisition is an eligible SBA 7(a) use, with 10% down on an acquisition. The loan can cover the purchase price of the routes, the accounts and the trucks, plus working capital for the transition. Expect 30 to 45 days on a standard 7(a).
Can an SBA loan pay off a merchant cash advance?
Generally no. Paying off a merchant cash advance is usually not an eligible SBA refinance use. If you are carrying advances, the realistic consolidation path is a term loan. Ask us before you plan around it.
Can I buy my warehouse with an SBA loan?
Yes. Owner-occupied commercial real estate is an eligible 7(a) use with terms up to 25 years, and an SBA 504 may fit better for a pure real-estate purchase. Tell us whether you intend to occupy the building yourself; it changes the structure.
How much do I have to put down on an SBA distributor loan?
10% on an acquisition or on a start-up where the owner has industry experience. Real-estate-secured loans and expansion files vary; the required injection is stated in the term sheet before you sign.
What credit score do I need for an SBA loan?
680. SBA is the highest credit bar of the five Dockdoor products. A line of credit needs 600+, a term loan 650+, and working capital and factoring have no minimum credit score at all.
How long does an SBA loan take?
SBA Express closes in 10 to 21 days. A standard SBA 7(a) takes 30 to 45 days. If the supplier wants the wire this week, that is what working capital exists for.
Does Dockdoor fund SBA loans directly?
No. Dockdoor Capital packages SBA files and places them with SBA-preferred bank partners, and does not make SBA credit decisions. Working capital, lines of credit and factoring are underwritten and funded in-house.
The cheapest distributor capital, if the clock allows it.
$50,000 to $5,000,000, 10% down, 680+ FICO, 24 months in business. Apply once and we’ll tell you honestly whether SBA or something faster is the right file.