Small Business Administration (SBA) loans are backed by the government to help mitigate the risk and encourage lenders to support these types of businesses with the capital they need. Typically, these types of loans have lower down payments, competitive interest rates, and better repayment terms than conventional bank loans.
Having earned the Preferred Lending Program designation from the Small Business Administration, First Financial Bank and our team of experienced loan officers can help answer any of the questions you may have.
There are a variety of benefits to taking advantage of an SBA loan, including:
First and foremost, a business entity and owners with good credit. SBA loans do have an extensive application process. You’ll need good credit, solid business financials, and a business with a history/track record to be eligible for an SBA loan.
The most common recipients of SBA loans are “small business” owners seeking financing. The size standards for what is considered a “small business” vary by industry. Generally, under 500 employees for most manufacturing and service industries.
While riskier, startups seeking capital to launch or in their first couple years of business may be eligible for SBA loans, usually for smaller loan amounts. Lenders will want to review the business plan thoroughly.
A primary use of SBA loans is for acquiring an existing small business, including real estate, equipment, inventory, etc. This includes start-up agricultural businesses, such as commercial poultry farms, too.
Existing businesses looking to expand operations, renovate, or add another location can use SBA financing for funding. The business must show the ability to repay the loan.
Some organizations are not eligible, such as those that are illegal under any state, local, or federal regulations; gambling organizations; or restrictive membership clubs. Learn more here.
There are several types of SBA loans, with the two most common being the:
Before applying for a loan, you’ll want to have your business plans in place. Find and research businesses for sale that meet your criteria:
Choose an institution that is part of the SBA Preferred Lender Program – like First Financial Bank. The loan officers at this institution provide a wealth of experience in navigating the process efficiently. At this point, you’ll be working with the loan officer to submit the loan application, along with other relevant elements, including these documents:
Once the loan officer has all the documentation with the application, the application is put through the review process, and a decision is made. If approved, be prepared to pay the Guarantee Upfront Fee required for an SBA loan as part of your fees at closing.
First Financial Bank has earned the designation as a member of the PLP (Preferred Lending Program) from the SBA due to our experience, expertise, and efficiency. First Financial Bank is approved to offer SBA loan products under SBA’s Preferred Lender Program or SBA Express Program.
What does this mean for you?
You get loan officers who understand your business and how to navigate the paperwork processes for the loan you need. More importantly, you get a bank that has been empowered to make the decision directly for lending you the funds your business needs. If you are not working with a member of the PLP, the lender has to submit your paperwork to the SBA for review. Working with a PLP member cuts out that step and can help speed up the process from application to decision to closing – to buying or expanding your business.
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First Financial Bank does not guarantee loan approval, rates, or terms. Each situation must be evaluated separately.