SBA loan brokers (Small Business Administration) work with bank and commercial lenders to provide new and existing small businesses loans to purchase or expand a small business. SBA lending is designed to provide financing for small companies that haven’t been able to secure traditional bank financing. An SBA lender provides financing to the small business, while the U.S. government guarantees the lender’s loss if the small business borrower defaults on the loan.
“We carefully conduct our due diligence before submitting your SBA application in order to optimize your chances of securing funding.”Harry Sidhu, Principal SBA Loan Broker
By reducing risk to banks and lenders, with the SBA guarantee, commercial lenders are more inclined to approve loans they would not have typically funded. Not surprisingly, since the SBA is taking the majority of the risk as the guarantor, the SBA requires the small business owner and the lender to meet certain guidelines for the SBA guarantee and funding.
California SBA Loan Brokers
SBA loan brokers will determine what type of SBA loan is most appropriate for the borrower. The two primary options your SBA loan broker will consider for your goals is the SBA 7(a) and the SBA 504 programs.
The SBA 7(a) is the SBA’s largest lending program which is an umbrella for a number of other SBA financing options. SBA 7(a) loans can be as much as $5 million, but the government will only guarantee up to $3.75 million for any one small business. Use of SBA 7(a) loan proceeds include starting a business, purchasing an existing business, purchase a building, construct new buildings, working capital, purchasing of inventory, fixed assets and raw materials, leasehold improvements and, in some qualifying situations, refinancing and consolidation of business debt. SBA 7(a) financing is offered as both a term loan facility and also as a line of credit.
The SBA 504 are used for commercial real estate. These loans can also be used for a business acquisition that includes commercial real estate. SBA loan brokers favor this program for borrowers because the loan term tends to be longer than the 7(a) program [20+ years for the 504 loan compared to 7-10 years for the 7(a)]. The longer duration generally also reduces the monthly payment.
Contact Our SBA Loan Brokers
Mission Peak Brokers has extensive experience brokering SBA loans. We have a 99% close rate. Whether you are buying a new business or a new business with real property, or refinancing, contact one of our SBA Loan Brokers to explore your financing options and see if an SBA loan is right for you. .