PUTNAM COUNTY, N.Y. -- Small businesses have long been called the engine of the U.S. economy. The description is apt: over the last 20 years alone, small businesses have created two out of every three jobs, according to a National Economic Council report. and recent research indicates that small businesses are more optimistic now than they’ve been since 2008.
If small businesses drive job creation, then Small Business Administration loans help drive the growth of small businesses. That’s because the SBA provides guarantees for entrepreneurs who otherwise may not be able to obtain a loan. Many individuals who want to start or grow their companies may have a good business plan, but they lack the capital or collateral to obtain a conventional bank loan.
These individuals are often good candidates for an SBA guaranteed loan, which you obtain through your local bank. The SBA loan program provides a number of options for small businesses, including:
- 504 loans - An existing company that wants to purchase owner-occupied real estate can benefit from this SBA program. The bank provides a traditional commercial mortgage for 50 percent of the value of the property. In most cases, the remaining 50 percent is broken down into 40 percent, which the SBA provides through something called a Community Development Corporation, and 10 percent provided by the borrower. Fees are rolled into the loan; the rate is fixed for a full 20 years.
- 7A loans – This SBA loan program can be used for business acquisitions, equipment financing, working capital and debt refinancing under certain conditions. Term loans and lines of credit in smaller amounts are also available under this program.
- Veteran and Military Community Loans – Veteran-owned businesses may qualify for special programs.
The key to SBA loans is finding one that fits your new or existing business’s particular needs. This is where your community bank can help.
An SBA lending bank like Tompkins Mahopac Bank can analyze your situation and come up with a creative solution that could involve a combination of SBA and conventional bank financing. Your banker also can guide you through the SBA lending process and assure that all the documents are submitted.
SBA loans provide a number of benefits to business owners. As you work with your banker, you will find tools like SBA loans that are a good way to get your business started and growing.
Talk to an experienced banker who can help guide you through the SBA loan process. Contact Ron Ferri, Tompkins Mahopac Bank, Vice President, Small Business Lending Manager firstname.lastname@example.org 845-278-1027