What Can SBA Loans Do for You?

Eben JohnsonBy: Eben Johnson ~ Commercial Banking Officer


Starting a new business can be a cumbersome endeavor on its own, not to mention obtaining the financing to do so.  Getting through the lending requirements of a traditional bank loan may be the only thing standing between you and your entrepreneurial dream.  If you’re running into difficulties obtaining funding, there may be a SBA (Small Business Administration) loan program that can help.


SBA loan programs have become streamlined to create more access and opportunity for both banks and borrowers in an effort to encourage economic growth.  A number of both large and small lending institutions, including community banks, participate in SBA programs.  Locally, community banks have expanded their reach on the SBA front becoming SBA “preferred lenders”, namely FNB Fox Valley, ranked as the top SBA lender in Wisconsin among similarly sized banks.


How SBA Works

The SBA generally doesn’t lend businesses money.  Most often they help banks lessen risk by guaranteeing part of the loan if the borrower defaults.  Available SBA programs include guaranteed loan programs, bonding programs, and venture capital programs.


Guaranteed Loan Programs – What’s Right for You?


Basic 7(a) Loan Program

The most basic and most commonly used SBA program is the Basic 7(a) Loan Program.  This program provides loans for eligible borrowers who are starting, acquiring or expanding a small business.  These loans can be used for several different business purposes including purchasing equipment, machinery, supplies, real estate or funding construction.


Certified Development Company (CDC) 504 Loan Program

This loan program provides growing businesses with long-term, fixed rate financing for major fixed assets like land, buildings, parking lots, landscaping or renovation/modernization projects.


Microloan Program

These very small, short-term loans are offered for start-ups, newly established or growing small businesses at a maximum loan amount of $50,000.  Funding is available from nonprofit, community lenders who make underwriting decisions on a local level.


A number of other SBA loan programs are available like disaster recovery, export assistance, veteran and military community loans, and other special purpose loans like pollution control financing.  To find out which government financing program would best suit your needs, check out the Loans and Grants Search Tool, or talk to your local lender to determine which program matches your business plan.


Getting Started

If you think a SBA loan is right for you, find a local lender who is able to offer SBA programs.  A lender that is considered a SBA “preferred lender” like FNB Fox Valley, does a number of SBA loans annually, so you can be sure that every option will be explored until they find the right fit for you.


Once your lender is selected, be sure to have your financial “ducks in a row” before starting the loan process.  Some things you will need to provide during application are:

-          Personal background information

-          Resumes

-          Business Plan

-          Personal  and Business Credit Reports (personal credit will be obtained by your lender)

-          Income Tax Returns

-          Financial Statements

-          Bank Statements

-          Collateral

-          Legal Documents like business licenses, articles of incorporation, franchise agreements, etc.


Your lender will ask you to explain a few things like: why you are applying for the loan, how the proceeds will be used, what assets need to be purchased and from where, what other business debts you have and who the members of your management team are. There are certain restrictions to what SBA funding can be used for, so be clear and descriptive with your lender about your intentions.


A SBA program may just be the answer you’re looking for to fulfill your dreams of owning your own business or improving an already existing business.  For questions regarding SBA programs or opportunities for you, please contact a commercial lender at FNB Fox Valley by calling 920.729.6900.  We’d love to help turn your dreams into a reality!