If you have a small business, and you need a loan, or maybe you have had some trouble getting a conventional loan, an SBA-backed loan may be the best choice. Small Business Administration loans offer affordable financing options, with small businesses more easily meeting the lending qualifications than for traditional loans.
SBA loan is a bit of a misnomer. The SBA doesn’t actually lend money directly to businesses. A bank makes the loan, and then in turn works with the SBA to get a guarantee between 50% and 90% of the loan. If the bank has experience with SBA and they are a Preferred Lender it is even easier to work with the SBA. So, choosing the right lender is important.
With SBA-preferred lender status and SBA Champion, Rosa Scharf, Howard Bank is a good choice as a lending partner. “The delegated authority from the SBA (that’s what the SBA-preferred status signifies) means that we have a 99.9% chance of getting the loan through the SBA process and approved. Howard’s size and position [in the region] means that we are much more nimble and flexible than larger SBA lenders, and usually the first one at the table.”
This competitive edge also provides the business more focused and local attention and knowledge. “You need a partner, and you’re getting the same level of expertise as the other banks, but I just have to walk down the hall to talk to the credit decision makers,” notes Ms. Scharf. There is no call to Raleigh or Buffalo. There is no need to sell the market to the person making the loan decision. He or she is local and understands the value of the local market.
Howard Bank offers the same level of service for a half a million-dollar company as for a ten-million-dollar company. The products change and needs change a little, but in general you need the same advice.
“I can’t change the rules. They are what they are. But I can make it a little less painful.”
The Howard Advantage
Howard Bank’s experience means we understand the SBA and how it works, and what can get done. We are the perfect partner to shepherd you through the process.
“That’s where my 20 years of doing it comes into play,” says Rosa. “And that’s what I tell prospects. I can’t change the rules. They are what they are. But I can make it a little less painful. Because of my experience, early on when I’m talking to someone, I can say, ‘These are going to be our hurdles from an eligibility standpoint.’ So, you don’t have to go through a loan process for three months, and then say, ‘Oh, we can’t do it.’ I can tell you up front what qualifies and what doesn’t qualify.”
February 16th, 2017 by April Marasco
SBA-backed loans provide affordable financing options for small businesses that may have difficulty obtaining financing via traditional channels. Howard Bank is a preferred lender for loans that are guaranteed by the Small Business Administration.
Here are seven things you probably don’t know about SBA loans:
- The SBA doesn’t actually lend directly to businesses.
The bank makes the loan, and then works with the SBA to get them to guarantee between 50% and 90% of the loan.
- Personal credit is important in the SBA loan process.
Especially with true startups, there is usually no credit history for the business and little collateral, so the credit history of the business owner(s) is significant. The owners’ credit history is an indication of how they handle credit.
- The SBA won’t deny a loan because of collateral (lack of), but all collateral must be taken into account
The SBA requires the bank to consider all available collateral for the loan request. This could include the business owner’s equity in their home, vacation home, etc.
- Quality is more important than quantity when you are deciding whether to apply.
Business Plans should be concise and cover the important details. The What, Why, Who, How and When of your business.
- Banks are interested in small business loans.
Banks in general, and Howard Bank specifically, are very interested in helping small businesses grow and become really good bank customers. The SBA is a great tool that helps Howard Bank add value to the businesses in the communities we serve.
- The SBA process doesn’t take as long as most people think.
Especially with an experienced SBA-preferred lender like Howard Bank, it is easy to navigate this process smoothly and avoid any potential obstacles. The experience Howard adds cannot change the SBA rules, but it does make it a lot less painful!
- Borrowers must be a small for profit business in order to be eligible for an SBA loan.
A business must meet size standards to qualify for an SBA loan. Generally this means $7.5 million or less in revenue and 500 employees or less (depending on the industry).
With more than 20 years of SBA-backed lending experience, Rosa Scharf is the SBA Champion at Howard Bank, who works to provide SBA loan solutions to small businesses in various industries.