SBA Loan Approvals in 2013 and 2014
SBA loan approvals in 2013 and 2014 continue to be the main source of third party finance if you are selling or buying a business. This is because the banks that underwrite and approve these loans through the Small Business Administration, receive a guarantee that allows them to offset some of the losses they incur if the borrower defaults. Additionally, the banks are under intense scrutiny by the FDIC to ensure all the loans they underwrite and approve are done to the highest standard. The SBA loan process is incredibly detailed and so this forces underwriting to be done at the highest standard or the SBA will not pay the default fee.
The regional offices of the SBA provide different services but it includes providing support to the lenders in their region. One of the reports they release is loans being approved in their region and I think it’s helpful as it shows which banks are lending which is especially helpful if you are looking to get a loan for your business.
In addition, it was recently announced that for all SBA 7(a) loans approved for less than $150,000 there would be no upfront guarantee fee or be subject to the yearly fee. Make sure you clarify this as you complete your application process but it’s good news for borrowers needing an SBA loan of less than $150,000. This policy is set to expire March 01, 2015 but do not leave it too close to that date as SBA loans take a long time to go through the approval process.
The Small Business Administration or SBA has a regional office in Citrus Heights, CA. Citrus Heights is located in Sacramento County.
Please click the following link to see which banks are actually approving SBA loans in 2013 and 2014 in Northern California.
Getting an SBA loan approved is a formal process. There are many forms to complete and you will need to have a good credit score, a good credit history and a downpayment of about 20% of the amount you wish to borrow. If the funds are to buy an existing business, the lender will want to see management experience in that industry.
If you have questions about getting an SBA loan to buy a business or sell a business, give me a call on 916 570-2674.