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1st Source Bank

SBA Preferred Lender in South Bend, IN: SBA 7(a) and Express loans $5,000 to $5M for IN and MI businesses, 8.875% median rate, startups welcome. Collateral required.

SBA & Government-Backed Loans:
SBA 7(a) LoansSBA Express Loans
Tags:
#Working Capital#Secured#Buying A Business

Rates & Cost

What the financing costs, normalized so lenders can be compared.

Estimated APR:
7.75% to 10.25% starting rates, median 8.875%, on 56 SBA 7(a) loans in the 12 months to Jun 30, 2026 (SBA FOIA); ~9.41% APR incl. 3% guaranty fee on a $350K 10-yr example
Pricing (as quoted by lender):
Lender does not publish rates or its spread; SBA cap Prime + 3.0% on loans over $350K, Prime + 4.5% on $250,001 to $350K
Cost to borrow $100K for 6 months:
≈$6,079 (interest at 8.875% on 10-yr amortization repaid at month 6 + $1,700 SBA guaranty fee)
Fees:
SBA upfront guaranty fee 2% of guaranteed portion (≤$150K), 3% ($150,001 to $700K), 3.5%/3.75% above; lender fees not published; no prepayment penalty under 15 years (lender)
Early payoff:
Allowed; no penalty on terms under 15 years; SBA prepayment fee (5%/3%/1%) only on 15+ yr loans when 25%+ prepaid in first 3 years
Pricing transparency (0-3):
1

Repayment Terms

How and how fast you pay it back, and how flexible it is.

Term:
6 to 122 months on the last 56 SBA 7(a) loans (20 at 120 months); up to 20 years on real estate (24 loans at 240 months since FY2020) (SBA FOIA)
Repayment schedule:
Monthly, fully amortizing, no balloon; 40 of 56 recent loans variable (tied to Prime), 16 fixed
Flexibility in slow months:
Low — monthly fully amortizing SBA payments; variable-rate loans rise with Prime

Eligibility & Access

Who qualifies and what you have to put on the line.

Funding amount:
$5,000 to $5M (lender); last 12 months $12,000 to $3,897,800, median $152,150 (SBA FOIA, as of Jun 30, 2026)
Minimum revenue:
Lender does not publish; must meet SBA size standards
Minimum time in business:
Lender does not publish; startups eligible (24 of 56 SBA 7(a) loans in the last 12 months)
Credit check:
Lender does not publish a score floor; full credit underwriting with tax returns and financial statements
Personal guarantee:
Required from owners of 20% or more, with a personal financial statement under 60 days old (lender, SBA rule)
Collateral & lien:
Secured; collateral taken on all 56 SBA 7(a) loans in the last 12 months

Speed & Service

How fast you get funded and how the lender treats you.

Time to funding:
Lender does not publish; standard SBA 7(a) loans often take 60 to 90 days (third-party); PLP/Express in-house approval skips 5 to 10 business days of SBA review
Lender status:
Active (FDIC active; 56 SBA 7(a) approvals in the 12 months to Jun 30, 2026; checked 2026-10-27)

Company Verification

Who actually stands behind the lender: legal entity, registration, and how long the business and its website have existed. Checked against public registries.

Legal entity:
1st Source Bank
Registered in:
Indiana (FDIC cert #9087)
Company formed:
Chartered 1922
Website domain registered:
Oct 1995
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Best for: Indiana and Michigan businesses, startups included, that want a local SBA 7(a) or SBA Express loan and can pledge collateral.

Not for: Borrowers outside Indiana and Michigan, or anyone wanting posted rates or an unsecured loan.

Lender List verdict: 1st Source Bank is a South Bend SBA Preferred Lender that approved 56 SBA 7(a) loans worth $16.0M in the 12 months to June 30, 2026, at an 8.875% median rate. Of those, 24 funded startups.

1st Source Bank at a glance

1st Source Bank, of South Bend, Indiana, makes SBA 7(a) loans in Indiana and Michigan.

1st Source Bank
Lender typeFDIC-insured bank (cert 9087); SBA Preferred Lender
Founded / HQ1863 (FDIC: 1922) / South Bend, Indiana
Amounts$5,000 to $5M (recent median $152,150)
Cost (headline)7.75% to 10.25%, median 8.875% (last 12 months)
Term6 to 122 months recently; up to 20 years on real estate
StatusActive; last SBA approval June 25, 2026

What is 1st Source Bank?

1st Source Bank is a South Bend community bank dating to 1863, with about $9.3 billion in assets.

It has approved 612 SBA 7(a) loans totaling $125.7M since FY2020, 549 in Indiana, and won the SBA's Indiana Gold Level lender award 2013 to 2025. Source: SBA 7(a) FOIA data, FY2020–present, as of June 30, 2026 (data.sba.gov).

How a 1st Source Bank SBA loan works

1st Source Bank approves SBA loans in-house as both a Preferred Lender and an SBA Express lender.

Loans fund equipment, inventory, real estate, working capital, acquisitions or refinancing.

1st Source Bank interest rates and fees

1st Source Bank's SBA 7(a) loans in the year to June 30, 2026 started at 7.75% to 10.25%, median 8.875%. With Prime at 7.00%, SBA caps variable loans of $250,001 to $350K at 11.5% and larger ones at 10.0%. SBA charges a 3% guaranty fee on the guaranteed share of loans from $150,001 to $700K; bank fees are unpublished.

Worked example: $350,000 over 10 years at 8.875% is $4,410.01 a month, or $179,201.13 in interest. Add the $7,875 guaranty fee ($350,000 × 75% × 3%) for total cost of $187,076.13, about 9.41% APR with the fee financed.

1st Source Bank requirements

1st Source Bank publishes no credit score or down payment floor.

Requirement1st Source Bank
LocationIndiana or Michigan project
CollateralTaken on all 56 loans in the last 12 months
Personal guaranteeOwners of 20% or more
Business sizeMust meet SBA size standards
Credit score / time in businessLender does not publish

Compare SBA 7(a) lenders, or see Busey Bank and the loan marketplace Lendio.

Frequently asked questions about 1st Source Bank

Is 1st Source Bank Legit? Yes. 1st Source Bank is an active FDIC-insured bank (certificate 9087) with roots to 1863 and $9.3 billion in assets. As an SBA Preferred Lender it has made 612 SBA 7(a) loans since FY2020; only 5 were later charged off.

How Long Does 1st Source Bank Take to Close an SBA Loan? 1st Source Bank does not publish a timeline; standard SBA 7(a) loans often take 60 to 90 days. Its last 56 loans were all approved in-house (29 Preferred Lender, 24 Express, 3 Working Capital Pilot), skipping the 5 to 10 business days of SBA review other lenders face.

Does 1st Source Bank Lend to Startups? Yes. Twenty-four of 1st Source Bank's 56 SBA 7(a) loans in the 12 months to June 30, 2026 funded businesses that had not yet opened. Eight more went to firms two years old or younger. Collateral and owner guarantees still apply.

Where Is 1st Source Bank Located? 1st Source Bank is headquartered at 100 N. Michigan St. in South Bend, Indiana, with 81 offices and banking centers in 19 counties. Its SBA lending stays local: 52 of its last 56 loans were in Indiana and 4 in Michigan.

Last verified 2026-10-27. Pricing and terms are provider-stated or third-party-reported and vary by offer; confirm with the lender before applying.

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