Have you ever wondered about Small Business Administration (SBA) loans, and whether their favorable terms can help your small business flourish? Whether you are a brand new start-up or have been in business for a couple of years, an SBA loan may be just the opportunity you need to grow your business. We asked Megan Comfort, Senior Vice President at Nevada State Bank, to provide some guidance on accessing and qualifying for these loans.

“As Senior Vice President for SBA and Small Business Manager at Nevada State Bank, I work with my team and our clients to get financing for Nevada businesses,” explained Comfort. “One of these financial sources is the SBA. We help with educating small businesses by explaining the process and how the business can benefit from and utilize these loans to achieve their financing goals.”

“Small businesses should always partner with a bank,” she advised. “Bankers know how to package a loan to get SBA financing*, and Nevada State Bank is one of the top banks for SBA loans in Nevada.” Nevada State Bank has been designated an SBA Preferred Lender, having demonstrated proficiency in processing and servicing loans guaranteed by the federal agency. The Nevada district office of the U.S. Small Business Administration recently announced its 2018 Nevada SBA Lender Award Winners, and Nevada State Bank was named the top statewide lender by number of loans.

What services and tools does the SBA have to help start-up businesses? Comfort explained that the SBA sponsors SCORE (Service Corps of Retired Executives) and Small Business Development Centers. These organizations help entrepreneurs understand SBA tools such as business plans, assist with loan applications, and provide low-cost training and counseling.

A common misconception is that SBA-guaranteed loans are only for start-ups. Comfort stated that, while SBA loans are often used to provide capital to new businesses, they are also available to existing businesses that previously had difficulty accessing capital. That is because SBA loans offer lower down payments, longer re-payment terms, and more flexible qualifying standards.

When asked what information the SBA needs to help with a business’s financing request, Comfort responded that the SBA wants to help a small business grow and expand. “They want to see a targeted and detailed business plan, along with projections and details on how to achieve these numbers. For example, perhaps the financing will be used to generate more jobs, which will lead to better profitability. Or the financing will purchase better and new equipment, leading to better automation, more sales, increased efficiency and improved profitability.”

Of course, as with any financing, the SBA and the partnering bank will take into account the business’s ability to repay the loan, she cautioned. The up-side of the SBA loan guaranty is that it is available even to borrowers who may need the extended amortization time for repayment, or who lack sufficient collateral, or who cannot provide the higher down payment usually required with conventional financing.

Comfort disputed misconceptions about the length and complexity of the SBA loan application, advising that the amount of information required is about the same as for a conventional loan. “There are only a few additional forms that need to be completed to benefit from the SBA loan guaranty,” she explained.  

What if your business is no longer “small” in the traditional sense? You can still benefit from an SBA loan guaranty, since the SBA 504 loan program has maximum net worth limits of $15 million and net profit limits of $5 million.

And if the business is denied an SBA loan? “Then we ask what they can do to improve their situation to get financing next time. We provide them with a road map on what to do and where to go and how they can qualify,” said Comfort.

“My team and I enjoy helping small businesses the most,” she concluded. “It’s not just about helping them receive funding. We enjoy acting as advisors and educating them to be successful business people.”

Contact your Nevada State Bank business banker to learn how an SBA loan* can help YOUR small business.

*All loans subject to credit approval. Terms and conditions apply. See a banker for details.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.