As we enter the New Year, many business owners will spend some time evaluating new opportunities and addressing any challenges that may have popped up over the last year or two. Almost every growth strategy, business expansion, or significant equipment purchase will require additional capital. With interest rates still considered historically low, now may be the time for small business owners to learn more about their financing options. That’s where the Small Business Administration (SBA) combined with the resources of First Independent Bank can help.
As long as an applicant meets all credit approvals and submits the required legal documentation, SBA loans can be a great resource offering beneficial loan rates and longer terms than conventional financing.
The SBA’s most common loan program is the 7(a) loan. This type of loan can be used for several purposes, including:
Purchase of Equipment
Purchase of a Franchise
Purchase of Real Estate
“The first step for any small business owner is to determine what is the loan’s purpose?” said Jim DeVolld, managing director, commercial banking at First Independent Bank. “Once we know how the funds will be used, we can easily determine if the SBA loan will be beneficial to the business, as well as what other resources - including a cash down payment- is available to contribute to the project.”
A 7(a) loan can range from a few thousand dollars up to a maximum of $5 million. A borrower can choose a fixed-rate or variable-interest-rate loan.
Who is eligible for a 7(a) loan?
Most small businesses are eligible for financial assistance from the SBA, with some exceptions that your banker can provide. The more general eligibility conditions include:
Business must be a for-profit entity
Be a small business as defined by the SBA
Doing business in the United States
Have reasonable owner equity to invest (typically minimum of 10% equity)
The first step in determining whether a SBA 7(a) loan is the right option for your business is to speak with an experienced banker. Our SBA Banking Team is ready to help and will provide the experienced insight that Northern Nevada businesses have come to rely upon.