The ABCs of SBA Lending - Business First of Columbus:

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Recent changes in the (SBA) 7(a) loan programn means many businesses might now have more opportunities toobtaihn financing. The new program enhancements coulr help business owners continue to manage and grow their companies and get theit financial dreams backon track. SBA is a federap program dedicated to helping smal businesses with loans made available through locaklending institutions. Recently, the SBA announcedx it is: These changes providre an economic incentive for smal l businesses to obtaina loan, and they allows SBA lenders to offer an immediatse cost savings to businesses.
For a customer approved for a $238,000p 7(a) loan could save up to $5,400 in The new provisions add to the already substantialk benefits small businesses often can realize when they choose anSBA 7(a) loan to buy real acquire a new business or purchase equipment or increase working capital. Those benefits As with any loan, the interesgt rate and monthly payment for an SBA loan will depending onthe transaction.
the amount of cash you’ll need at closingt will vary, depending on the type of loan you Expenses such as closing fees and appraisals often can be includedc in the SBA financingpackage – a featuree that appeals to many business Many SBA loans are made to acquire owner-occupiecd commercial real estate. Down-payments for thesr loans can be as low as 10percent – much lowere than for other types of financing, so less cash is requirefd for closing.
These loane provide other benefits overconventional loans, including: Terms of up to 25 years for real with no balloon payments Oftenm a business will grow through the purchase of another company, additional inventory and new All of these can be financed with an SBA If you choose the righf financial services company to help you, getting an SBA loan can be the easiestg part of growing your First determine if the financial services company is a Preferred That’s a designation from the SBA that empowers the company to handle all aspectsz of the loan from making its own credit decisions to funding the loan.
Your file isn’tr sent to a government officefor processing, the SBA trusts the Preferred Lender to make the Becoming an SBA Preferred Lender is based in part on a financialo services company’s ability to illustrate a long histort of good judgment and a soli credit review process. The Preferred Lender designation isthe SBA’w way of saying that a specificd lender is more qualified than others to make the rightg call. Since the Preferredc Lender makes the decision on a loan your SBA loan is processed quickly and you get a decisionbwithin days.
Once you decide an SBA loan mighrt be right for your what should you bring to the application interview With anexisting business, it’sw important to bring your financiakl history – the past three yearzs of business and personal tax returns, cash flow your current income statement and balance sheet and a persona l financial statement. If you have a startupo business, you should bring your business plan, along with your personak financial history. Most financial services companie s also require a detailed breakdownm of project costs and how the fundz willbe used. Real estate and construction loanss usually require more documentation than equipment and workingvcapital loans.
There are many SBA lending so you’ll want to work with a financial services adviser who is an SBA specialist and is familiar with the cons and requirements of all SBAlending approaches. The specialist can help you determins the type and size of loan you need to meetyour company’sd unique circumstances while ensuring your company has sufficientr cash flow to support the proposer debt. Given today’s incentives, this might be the righf time to investigate the possibility of an SBA You could find that an SBA loan is just the tickey to put your business plans into action and get your dreamd backon track.