Commercial Loans �" The Single Most Import Sba loan Program In Existence

The Small Business Administration is charged with helping small businesses survive and grow. Some of the programs offered by the SBA aren't all that helpful, but one certainly is and that makes it the single most important Sba loan program on the market.The SBA was created in the 1950s to help small businesses in a host of areas. One area that the agency is most known for helping with is financing. The SBA does not provide direct financing to borrowers, but does provide loan guarantees. This essentially means that if you fail to repay the loan, the bank that lends you the money is not left hanging. This lack of risk makes Sba loans very popular with banking institutions.The 7(a) loan program is considered the bell weather loan for the SBA. Why? It is incredibly flexible and the lending requirements are such that many small businesses are able to get financing that would not have otherwise happened had they just directly applied to a bank without the help of the SBA. From a flexibility perspective, the program is great because it can be used for a host of different business needs including, but not limited to, the purchase, construction or renovation of property; the purchase of land; working capital; furniture and furnishings and machinery. The lending process is a bit complicated. Borrowers must apply directly through banks participating in the program. Despite this, the borrower must comply with all SBA requirements in addition to the normal bank inquiries. The bank then determines if it will write the loan on its own or ask for a SBA guarantee. If it asks for a guarantee, the SBA then reviews the loan package and makes a determination on what it is willing to guarantee. Typically, the SBA will only guarantee a certain percentage of the loan. It might be 50 percent or it might be 75. It just depends. As you can probably see, positioning yourself correctly at the outset of the process is critical. The devil is in the details with these loans, which makes retaining an experienced broker a very smart move when seeking out this funding.