What to Expect with SBA Lending
Nearly all small and medium-sized businesses are eligible. The applicant must:
- Meet the eligibility criteria of SBA lending
- Have management experience
- Demonstrate repayment ability
- Provide adequate collateral
Preliminary response can be given within 48 hours. Generally, a loan decision is available within two weeks of receipt of a complete package. Funding within six to eight weeks.
Timing is usually determined by responsiveness of borrowers and complexity of loan and borrowing entity.
Government Lending FAQ
Q: What is government lending?
A: Government lending is a term used to describe loans that are backed by the federal government. This backing or "Guarantee" helps lenders provide funding to business with the support of the federal government. This guarantee states that in the circumstance that the business were to default on the loan, the government would pay for a portion of the defaulted loan.
Q: What government entities provide these guarantees?
A: Typically, government guaranteed loans are back by the US Small Business Administration, which is an independent agency of the federal government that was created in 1953 in order to support and protect the interests of small businesses and strengthen the economy of the United States. Ultimately, the SBA helps Americans start, build and grow businesses.
Additional government guaranteed loans are available through a program of the US Department of Agriculture, Rural Development. The USDA provides guarantees to ensure that quality credit applicants can continue to receive loans to bolster the economies of rural and developing areas.
Other government guaranteed loan programs are available, but typically these two agencies provide the most accessible means of securing government guaranteed loans.
Q: What qualifies as a "small business?"
A: SBA's definition of "small business" is - Average (2 year) Net Income after Federal Income Taxes may not exceed $5 million and the tangible net worth may not exceed $15 million.
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