Aren't SBA Loans more for start-ups or companies that can't get conventional financing?
Not at all! While the program is great for these types of businesses, most of our requests are for borrowers that may otherwise be eligible for traditional bank financing, except for the terms. An SBA loan can have rates fixed for the life of the loan, terms out to 25 years, and up to 90% financing in some cases. These terms are not typically available through conventional channels, it just makes good sense!
How long does it take to process and close an SBA Loan? I hear the paperwork is overwhelming.
We hear this ALL THE TIME! While there is a process and specific paperwork that has to be completed for an SBA loan, it is by no means overwhelming. At Alliance Capital we are here to make the process as smooth and trouble free as possible.
Are the costs comparable for an SBA Loan vs. a traditional bank loan?
While you will hear many people talking about the OUTRAGEOUS government fees for obtaining one of these loans, it is not the case at all. All loans, whether SBA or not, are going to have fees attached to them. However, on a traditional bank loan these fees are usually above and beyond the 15% to 20% down payment conventional loans may require and they are coming out of your pocket. With the SBA they are almost always rolled into the loan which means all the benefits of the SBA for a few extra dollars per month.
Are the interest rates on an SBA loan comparable to traditional loans?
Comparable and better in a lot of cases! Unlike other sources of financing in which a lender can charge whatever legal rate they see fit, the SBA has guidelines for the maximum interest rate that can be charged to a borrower.
Will I have to pledge personal assets, such as my home, to obtain an SBA Loan?
It is possible, however, if there are sufficient business assets to secure the loan, personal assets will not have to be pledged.
I am looking at purchasing an existing business, is there an SBA Loan for that?
Absolutely! Business Acquisitions are a huge part of what we do on a daily basis.
I have limited funds for a down payment, can I still qualify for a loan?
Each and every deal is different. Over the years, we have processed several loans for clients whose personal financial statements do not demonstrate the necessary funds. Usually it just takes a little creativity in how we structure the purchase to get the deal approved and closed. (i.e. seller financing)
My credit history probably isn't the best you've seen, can I still qualify for a loan?
While your personal credit will play a big role in the rates and terms offered to you, they are not necessarily going to make or break a deal. If your business has good financial history, and the deal otherwise makes sense, your personal credit will not typically get your loan declined, as long as we can provide adequate explanations as to what caused the low score.
Why come to you rather than going directly to the bank that will ultimately make the loan?
Although we agree that middlemen can sometimes be a hassle and/or added cost, there are certain times when it makes sense. You wouldn't want to purchase your groceries direct from Kraft, Barbers, or Sunbeam? Would you? Like the grocery store for SBA Loans, we'll be able to put each and every option directly in front of you from various "vendors". What separates us from other middlemen is that most of our fees are typically paid by the lender, not the borrower, so you get all the benefit without much or any additional cost.