Small Business Loan

Created on 31 March 2012 Last Updated on 08 January 2016
Written by Administrator Hits: 5180

"Commercial Real Estate and SBA Loan"

Small Business LoanThe Small Business Administration was created in 1953 upon the passing of The Small Business Act of July 30th 1953. The SBA’s mission is to “aid, counsel, assist and protect small businesses”.

SBA lending provides unique products that can be offered to existing and potential customers by mitigating the risk associated with providing longer term financing to small businesses.

By using SBA Complete outsourcing services, your lending institution can offer these products with peace of mind that the documentation and servicing is performed correctly.

If you already are have put together your own internal SBA loan department, it may make sense to have SBA Complete “on your team” for ongoing technical assistance or on the spot consulting services (training, loan review, improvement of efficiencies).

The SBA 7(a) Loan Program is a guaranteed loan program, where the lending institution makes the loan, but SBA steps in with the payment of their guaranteed portion if the loan defaults. It is used to make term loans for most any type of financing needed by a for-profit operating business. For the fiscal year end 2011 the SBA approved 53,729 loans for 2,727 financial institutions. The gross loan approvals were $19.7 billion and the guaranteed amount was $15.4 billion.

SBA loans are available from commercial banks and lenders as part of a City Capital Realty program offered by the Small Business Administration. These Federal loans are very appealing to small business owners because they offer excellent terms. SBA loans, for instance, generally require much smaller down payments than traditional real estate loans from commercial lenders.

Small Business Loan are usually used to finance commercial real estate property. SBA 7(A) loans program require a 10% down payment and offer lower interest rates than traditional conventional loans. In addition, you may be able to borrow up to five million dollars depending on a variety of different circumstances.

Small Business Loan are popular among small business owners. The most common Small Business Loan are the 7(a) and the 504 loan packages; both deal with commercial real estate investments owner occupied businesses. One of the best ways to ensure you get financing from the SBA is to work with an experienced loan officer. City Capital Realty knows the ins and outs of the SBA loan program and is the best resource for ensuring you get the funds in a timely fashion.

Eligibility for SBA loan

•    An applicant business must operate for profit
•    A business loan applicant must have reasonable owner equity to invest
•    A business must be able to meet all its debt payments, not just its loan payments
•    A business must operate in the United States or its possession
•    Personal guarantees by all business owners (20% or greater) are required
•    Have net worth no greater than $15 million and net profit after taxes below $5 million in the last two operating years
•    Business owner(s) must have acceptable personal credit
•    Be organized as a sole proprietorship, corporation, partnership or limited-liability corporation (LLC)
•    Business must be owner-operated
•    A business must operate in the United States or its possessions