Friday, May 13, 2011

Business Loans Aren’t Just About Money

Getting your business financed isn’t easy by any means. There are several types of loans and several types of financial institutions you can look to for financing.
Here are some options:

SBA 7 (a) loans
As you know, the SBA 7(a) loan guarantee program provides long term financing for small businesses not normally available through conventional commercial lending channels. This program provides the nation’s small business community with manageable long term debt service. Loans can be guaranteed to a maximum amount of $750,000. The originating bank, Credit Company or credit union keeps the non guaranteed portion and services the loan. The guaranteed portion is frequently sold on the secondary market. This is true of the SBA 7A and each of the loan types
discussed below.

Nearly 3,000 lenders have made 7(a) loans last year which is up 21% from 2008. The 7(a) program is the SBA’s largest loan program. The SBA is involved in less than 10% of all small business loans, however, and some banks won’t participate because of red tape. Lenders must follow the SBA’s rules when making 7(a) loans, which can be used for working capital, fixed assets and other business expenses. The term of the loan can be as long as 25 years.

7(a) Loan Program

The 7(a) Loan Program includes financial help for businesses with special requirements. For example, funds are available for loans to businesses that handle exports to foreign countries, businesses that operate in rural areas, and for other very specific purposes.

•Special Purpose Loans Program

•Express & Pilot Programs

•Export Loan Programs

•Rural Business Loans

Eligible Use of 7(a) Loan Proceeds Include (Non-Exclusive):

•The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities

•The purchase of equipment, machinery, furniture, fixtures, supplies, or materials

•Long-term working capital, including the payment of accounts payable and/or the purchase of inventory

•Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production

•Financing against existing inventory and receivable under special conditions

•The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions

•To purchase an existing business

Don’t ever forget that getting a loan isn’t just about the money. When you choose to apply for a loan make sure you use a lender with whom you have been saving your money, making mortgage or credit card payments with, writing checks to, or you have a special relationship with. Granted, sometimes this will not be possible because your best bet to obtain financing will be from a specialty lender, but most of the time, it will. But what if you need the money now? This Community Bank can finance nationally. They offer both SBA-guaranteed and conventional financing. They will finance up to $300,000 for FF&E, and up to $10 million for restaurant acquisitions, new build and equipment purchases. For more information on Equity Bank, contact Brad Elliott,CEO/President at 316-858-3106 or by e-mail at

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