Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
Frequently Asked Questions
1. How does the SBA program work?
A lender provides the actual loan to the borrower in the 7(a) program. The SBA guarantees a portion of the loan (between 50%-85% depending on the program) acting much like a co-signer. This helps lenders be more comfortable with a loan that they might otherwise not approve, such as a loan for a start up, or a borrower that has less collateral than a bank requires. In the case of a 504 loan, the lender makes a first loan on fixed asset being acquired while a certified development company provides a "second lien" debenture to maximize the leverage on fixed asset acquisitions.
2. Why should I consider an SBA loan?
There are many reasons why an SBA guaranteed loan should be considered, including:
• Longer terms (up to 7 years for working capital; up to 25 years for real estate)
• Flexible repayment options
• Lower down payments
• Improved cash flow, so you can use your cash in your business
3. What types of loans are available through the SBA?
The SBA offers many types of loans, catering to certain business needs, including the 7(a) Regular Business Loan and 504 Development Company Loan.
4. How do I qualify for an SBA loan?
A bank would expect you to be able to repay the loan from the cash flow of the business. You must be of good character and never convicted of a felony. The SBA typically looks for management capability, collateral pledged and owner's equity contribution as part of the deal. If you own 20% or more of the company, you will be required to personally guarantee the loan. There are some industries that are not eligible for an SBA loan.
5. What other requirements does the SBA place on borrowers?
Each SBA loan program has different requirements. For specific information on your particular loan, contact one of our loan specialist today.
6. How do I apply for an SBA loan?
Contact a loan specialist Capital Growth Solutions. Learn more about the information needed to apply by reviewing our application checklist.
7. Can I get a line of credit?
Typically the loans funded by Capital Growth Solutions provide working capital that are repaid on a monthly basis over a predetermined period, ie: 7-10.
8. Why should I go to Capital Growth Solutions for an SBA Loan?
The SBA process does have more requirements and paperwork than a standard bank loan. However Capital Growth Solutions has SBA specialists in each of our markets, focused solely on SBA lending. Our specialists are able to dedicate their time to you, helping you understand what to expect throughout the process and helping you determine what is your best loan option.
Have a question about our programs?...