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The 504 SBA Loan Program provides long term financing for major fixed asset
purchases. This program provides loans from $250,000 to $2 million in financing
to small businesses and USDA loans up to $4 million. It is designed for corporations, partnerships, and
proprietorships with a net worth not to exceed $6 million.
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The 7A SBA Loan Guaranty Program provides the Bank up to 75% guaranty on
Long term loans when the proceeds of the loan are used for fixed asset
purchases, working capital, or the refinance of existing debts for
owner-occupied businesses.
 How do SBA
Loans work?
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 The U.S. Small Business Administration (SBA) was created by Congress in 1953 to
help America's entrepreneurs form successful small enterprises. SBA loans
are not actual government loans. They are, in fact, loans from a lender
that are guaranteed by the U.S. Small Business Administration. Most often SBA
loans provide funding for small businesses that are unable to obtain more
traditional financing. For loans over $150,000, the SBA guarantees up to
75 percent of the loan.
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If you would like to pursue a SBA Loan the following
general criteria must be met. In addition, each SBA Loan has other
criteria based on the purpose of the loan. This is a basic pre-qualification
checklist.
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Borrower must have between a 10-20% down payment, depending on the type and
purpose of loan.
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Collateral must be available to secure the debt. (The SBA does not provide
unsecured financing, however, goodwill may have a business value and therefore
qualify as collateral).
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Must be a closely held "for profit" business.
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All owners of 20% or more of the business are prepared to guarantee the request.
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Must be an "owner operated" business. (Apartments, strip-centers, mobile home
parks and churches do not qualify for this program).
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Lender requires borrower to have an acceptable credit history. (Beacon score of at least 640)
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Borrower has not filed bankruptcy in the last 2 years and does not have two or
more late payments after filing bankruptcy.
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If borrower and/or guarantor is currently involved in a lawsuit an
explanation may be required.
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Borrower and/or guarantor are current on all sales, withholding and IRS taxes.
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Borrower is a legal US resident.
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Purpose of loan will determine which SBA loan would be applicable. Loans may be
used for business acquisitions, building purchases, expansion of businesses,
commercial construction projects, purchase of heavy equipment or
specialty machinery with a lifespan of greater than 10 years and working capital.
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