Jan 05, 2012 01:55 PM
Every business needs a continuous flow of capital – and one of the most dependable sources for that capital is an SBA loan.
The Small Business Administration (SBA) is a federal agency that offers loan guarantee programs which are designed to encourage the growth of small businesses throughout the country. Founded in 1953, the agency has delivered more than 20 million loans – and one of the largest SBA lenders in the southeast today is Embassy National Bank in Atlanta.
A percentage of every loan is guaranteed by the SBA, which enables a lender to accept a greater risk on a small business that may not qualify for a conventional business loan.
Perhaps the two most valuable features of an SBA loan are (1) lower down payments and (2) longer term financing. This is especially important for a small business that is just starting out or that is about to expand – first, because the company can keep more cash for operational expenses and second, because the company can devote less cash toward debt repayment.
SBA loans are available for specific business purposes, including:
• Owner-occupied commercial real estate
• Business acquisitions and start-ups
• Franchise financing
• Working capital
• Improvements and renovations
• Inventory and equipment
• Debt refinancing
Certain banks that are financially sound and have demonstrated a proficiency at closing plus servicing SBA loans – such as Embassy National Bank – have earned the privilege of being designated by the SBA as a “Preferred Lender.”
SBA gives these lenders the authority to approve their loans, which means that these institutions make it easier, quicker, and more convenient to get a loan approved. Check the website www.SBA.gov for a list of the Preferred Lenders in your area.
There are two SBA loan programs – 7 (a) and 504 – that provide loans up to $5 million. The features and requirements of these programs differ, so it is important to discuss your specific financing needs with an experienced SBA lender, preferably one that has been designated a “Preferred Lender.”
One of the most common misconceptions about SBA loans is that they are a chore. That is not true. Loan officers at SBA lenders such as Embassy National Bank have been specially-trained to help business owners select the borrowing solution that’s right for them, then to expedite and to facilitate the loan application process.
We guide owners through every step with simplified documents – and a decision usually takes days, not weeks. Most importantly, the benefits of an SBA loan are well worth the effort:
• Up to 90% financing
• Terms up to 25 years
• Competitive market rates
• Facilitates owning real estate instead of renting
SBA loans sometimes can permit the financing of closing costs, can eliminate balloon payments or calls or covenants, and can be assumable by a new owner.
So if you’re a small business owner with big ideas for your company, it’s probably time to look into an SBA loan.
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Nitin Shah is Chairman & CEO of Embassy National Bank, a community bank located in the Atlanta suburb of Lawrenceville which is one of the leading SBA lenders in the southeast. He also owns hotels and commercial real estate as President of Imperial Investments Group, so he is keenly aware of the small business perspective in today’s economic environment. A former Chairman of the Asian American Hotel Owners Association (AAHOA), Shah’s e-mail address is nitin@embassynationalbank.com for questions.
