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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.
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!
OUR PROGRAMS
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