SBA Loans

SBA Loans are small business loans backed by the small business administration. It's very similar to the way in which FHA works in the residential lending field. The Small Business Administration does not directly lend to small business clients. Instead local direct lenders provide the funds secured through the SBA program. SBA loans are meant to fill a gap for small business client's that can't secure traditional financing through banks. In general the SBA can guarantee loans up to $1M, although there is a program that can go up to $2M.



Small Business Administration Loans

   Here we will provide a brief description of some of the primary SBA loan programs available to our clients today.
 
SMALL BUSINESS ADMINISTRATION (SBA) LOAN PROGRAMS
 
  • 7(A) Loan Guaranty Program (offers loans of up to $2,000,000)
  • Certified Development Company (CDC), a 504 Loan Program (Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. A contribution of at least 10 percent equity from the borrower is typical.)
  • Microloan Program (This new program offers loans of up to $35,000 to qualified start-up, newly established, or growing small business concerns.)
  • Gulf Opportunity Pilot Loan (GO Loan) Program (Program to expedite small business financing to those communities severely impacted by Hurricanes Katrina and Rita)
 
     This is just a small sampling of some of the programs offered through the SBA. You can visit the SBA website directly to get a detailed list and breakdown of all the programs they support.
 
    Many of our clients questions revolve around the size requirements for the SBA.

While the exact legal size specifications are very detailed and vary depending on the loan program involved, the most commonly applied maximum size standards are as follow:

  • 500 employees for most manufacturing and mining industries
  • 100 employees for all wholesale trade industries
  • $5 million for most retail and service industries
  • $17 million for most general & heavy construction industries
  • $7 million for all special trade contractors
  • $0.5 million for most agricultural industries

About one-fourth of industries have a size standard that is different from these levels. They vary from $0.5 million to $25.0 million for size standards based on average annual revenues and from 100 to 1500 employees for size standards based on number of employees. 

 

 
 
What's needed to get an SBA Loan?
  • Business Plan. A written document describing your business, including type of business and legal form; annual sales; number of employees; length of time in business; and the ownership structure.
  • Financial Statements (Business). Complete financial statements for the past three years and current or interim financial statements.
  • Financial Statements (Personal). Each owner, partner, officer, and stockholder owning 20 percent or more of the business must also provide a financial statement.
  • Loan Request. A description of how the loan proceeds will be used, along with the purpose, amount of loan request, and type of loan requested.
  • Collateral. A description of the collateral that will be used to secure the loan; description of equity in the business; potential to borrow funds; and availability of any cash.
  • Management Resumes. The resumes of those who will be involved in operating the business.
    The checklist shows that obtaining and SBA loan is not all that much different than a traditional loan when it comes to items underwriting. Some specifics that are needed in addition include that the business must not be able to obtain funds on reasonable terms from a bank or private source. The business seeking SBA funding must be independently owned and operated, not dominant in its field, and must meet certain standards of size in terms of employees or annual receipts. The Checklist further states that applicants for SBA loans will be required to comply with SBA regulations concerning discrimination in employment or services to the public.                       
 
    Now you can see why we are the premier source for SBA COMMERCIAL LOANS in the U.S. Our commercial  mortgage professionals are prepared to put their years of experience and our access to these commercial mortgage loans to work for you! Contact US today or APPLY ONLINE for a same day response and let's start working together to help your SBA Commercial Mortgage project get funded as quickly as possible!