SBA




		SBA LOANS *What is an SBA loan?* The Small Business Administration (SBA) makes loans available through participating lenders to eligible small businesses on favorable terms. SBA loans provide longer repayment terms and higher loan-to-value ratios than conventional business loans, making it easier for a small business to get the financing it needs. *Who is eligible?* Most types of businesses are eligible —manufacturing, wholesaling, retail and service —independent or franchised. For retail and service businesses, annual sales may not exceed $5 million to $20 million, depending on the type of business Wholesale businesses may have an annual average of up to 100 employees Manufacturers may have an annual average of 500 to 1500 employees, depending on the industry *How much can I borrow?* For the SBA 7(a) Program - Many of our lenders offer loans of up to $1.6 million. Under special circumstances, this limit can be raised. The minimum loan is generally $150,000, with loans below that going into the SBA micro-loan category. For the SBA 504 Program – There are two loans, split between the lender and the local SBA-approved Certified Development Company. Although the total size of projects using CDC financing is unlimited, the maximum amount of CDC participation in any individual project is $750,000 to $1,000,000. The CDC participation may not exceed 40% of the total project. The minimum CDC participation is $50,000. *What can I use an SBA loan for?* The most common uses of SBA loans are: Buying a business or franchise, or expanding your business through acquisition Purchasing real estate Buying machinery or equipment Refinancing certain existing business debt Obtaining working capital in conjunction with the above *What are the interest rates and fees?* For the 7 (a) - The interest rate is variable, adjusted quarterly, and will not exceed The Wall Street Journal prime rate plus 2.75%. Your actual rate will be determined by the term and use of the loan. With SBA 7 (a) loans, there are no points, no balloon payments, and no pre-payment penalties. There is a low packaging fee and an SBA guarantee fee of between 1.6% and 2.6% of the amount borrowed which can be financed as part of the loan. For the 504 program, interest rates are based upon the current market rate for 5- and 10-year U S Treasury issues plus an increment above the Treasury rate based on market conditions. Once set, rates and payment amount on 504 loans remain fixed for the term of the loan. There is an SBA fee and a lender fee, a packaging fee. Fees typically run from 3 to 4% of the loan amount. *What are the terms of repayment?* Terms are: Up to 25 years for real estate loans Up to 10 years for machinery and equipment Up to 7 years for the working capital part of the loan *How can I qualify?* The owner must be active in the business and financially committed to it. The owner must invest 15% to 30% for a new or start-up business, as little as 10% in an existing business All principals must show a satisfactory credit history The business must demonstrate an appropriate debt/net worth ratio and adequate cash flow *How long does it take to get approved?* With BLS decisions are quick. We use lenders with the SBA’s Preferred Lender Program status and our application process is as quick and easy as it can be. Once the lender can credit approve a loan, it is usually just a matter of days for the SBA’s decision. *How do I start?* It’s easy! Call us at 541-773-2188 and ask for Steve, Terry, or Bunny.

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