The SBA (U.S. Small Business Administration) knows that business owners want to get their loan applications turned around quickly. That’s why the most active and experienced lenders are given special status to make final credit decisions on SBA-guaranteed loans.
Here’s how it works: SBA Preferred Lenders can get you faster service than non-preferred lenders because they don’t have to submit the loan application to the SBA for approval (which can be time-consuming). Because of their “Preferred” status, they have the authority to approve or reject your loan on the spot.SBA Preferred Lenders, on the other hand, have shown that they have a thorough knowledge of the SBA’s rules and underwriting policies. These are lenders who have demonstrated through the volume of loans they have serviced they have the experience to make wise credit approval decisions.
SBA Express Lenders use their own forms when completing the loan application. The lender uses its own processes to approve loans guaranteed by the SBA. The entire loan application package is submitted to the SBA for approval, but turnaround can be completed in as little as 36 hours. The Express Program is a quick and easy way for business owners to apply for funding of up to $250,000.00.
Here are three of the most popular programs for SBA express loans:
- Traditional SBA 7(a) Program: The 7(a) SBA program is the best option for most businesses who have general business needs, like working capital costs. With a 7(a) SBA loan, you can secure up to $5M to repay within 10 or 25 years.
- CDC/504 Loan Program: A CDC/504 SBA loan program is typically used to cover large fixed assets like commercial real estate or equipment financing. This program offers up to a $5.5M loan with repayment terms lasting either 10 or 20 years.
- Microloan Program: The Microloan SBA program offers small-sized loans to newer, smaller businesses who are looking to grow and expand. These loans fall under the $50K amount and usually have longer repayment terms across the span of six years.
Where to Get an SBA Loan Near Me
The first place many small business owners start looking for an SBA loan is with the financial institution where they do their personal banking. To find out whether your local bank is an SBA Preferred Lender, call or drop into your local branch.
However, you aren’t limited to lenders you already have a previous relationship with when you are looking for an SBA loan. The best lender for your small business needs may not necessarily be the same one that helped you with your mortgage, personal investments, and college savings fund.
Go online to look for lenders that have experience lending money to small businesses similar to yours. If the lender is already familiar with the type of business you are running, you’ll spend less time explaining what your business does and more time focused on the specifics of your loan and why you would be a low risk client.
Don’t hesitate to talk to a lender that you haven’t done business with (yet). If the bank or trust company is an SBA Preferred Lender, it already has a lot of experience dealing with small business owners. Contact the lender and make an appointment to discuss your business financing needs in some detail.
Ways To Use Your SBA Loan
The funds you receive from a small business loan can be used for various purposes. Depending on the time of year and what your company needs to accomplish, your reasons for applying for an SBA loan may drastically differ from a business owner within another industry.
Here are six of the many ways you can use an SBA loan to quickly grow your business:
- Payroll: Make the most out of the summer season without worrying about payroll. Payroll takes time when it is handled manually. However, there are payroll services that you can use to automate the process and help to streamline operations. On the other hand, if you need help meeting a payroll increase, financing via SBA loan can help.
- Bookkeeping: Bookkeeping services can also be streamlined by using automated software in an effort to save labor costs and employee time. Cloud-based bookkeeping technology eliminates the efforts associated with tracking your company’s finances and expenses. Use your loan to reduce the hassle of traditional bookkeeping by funding an investment in bookkeeping software.
- Hiring: If you run a seasonal business, then you may want to allocate funds toward hiring new employees when the busy season arrives. Contractors tend to hire the most new crew members in the summertime, but competent construction hires are difficult to come by. Secure quality candidates when you find them and keep current loyal employees from working for your competition by offering good salaries that are funded from an SBA loan.
- Financing: If your company’s tools and technologies are outdated, use a business loan to finance new equipment. For example, there are several exciting trends in the dental industry this year that require finances to attain. However, the payoff is worth it, as modern equipment can be the difference between keeping current clients and leaving a bad impression on new clients when they enter your office.
- Marketing: Does your business have a solid marketing plan that generates leads and attracts website visitors? Securing an SBA loan is a great way to start a marketing campaign or boost your current budget. Depending on your loan amount, you may consider setting up a digital campaign complete with paid ads, search engine optimization (SEO), and content marketing initiatives to drive sales and increase brand awareness.
- Working Capital: Working capital enables business owners to cover the day-to-day costs associated with running a business, like rent and utilities. If you have any outstanding bills or payments that need to be fulfilled, an SBA loan is the perfect way to gain peace of mind by paying them off.