SBA Loans - Fueling the Growth of Small Businesses

Hopewell Valley Community Bank participates with the U. S. Small Business Administration (SBA) in making loans to small businesses. Small business has the highest potential for growth of any sector of our economy. Yet small firms often don’t have the credit history or collateral to qualify for a business loan through normal lending channels. That’s where the SBA comes in. Find out if an SBA loan is right for your business. Virtually any business purpose can qualify for a Small Business Administration (SBA) guaranteed loan, including:

• Commercial real estate purchase
• Construction
• Business acquisition or expansion
• Equipment/Inventory purchase
• Refinance
• Working Capital

Key advantages an SBA loan offers your company:

• Up to 90% loan-to-value
• Up to 25-year, fully amortized terms
• No balloon payments
• Quick approval for qualified borrowers
• Funding typically occurs in 30 to 45 days.

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Qualifying for an SBA Loan

SBA Real Estate Loans

The buyer must be an owner-user occupying a minimum of 51% of an existing structure, or 67% of a new building. Qualified properties include:

• Free standing industrial & commercial buildings
• Office, medical and industrial condominiums
• Hotels & motels
• Improvements on leased land
• Restaurants
• Franchise specialty buildings
• Steel buildings

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SBA Non-Real Estate Loans

• Financing for most business uses
• Terms of 5 to 10 years
• Proceeds used for working capital, inventory, equipment, business acquisition, debt refinancing

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Quick Reference to SBA Loan Programs

7(a) Loan Guaranty Program

• $750,000 to $500,000 maximum amount guaranteed in most cases
• 75% guaranteed by the SBA (80% if total loan is $100,000 or less)
• Proceeds can be used for expansion or renovation, construction of a new facility, purchase land or buildings, purchase equipment, fixtures, leasehold improvements, working capital, refinance debt for compelling reasons, seasonal line of credit, and inventory acquisition.
• Personal guarantees are required from all the principal owners of the business.
• Maturity depends on ability to repay; generally working capital is five to ten years; machinery and equipment, real estate, construction is up to 25 years (not to exceed the life of the equipment.
• To be eligible for the SBA 7(a) Loan Guaranty Program, your company must be operated for profit; meet SBA size standards; show good character, management expertise and commitment, and always show ability to repay; feasible business plan, sufficient collateral, adequate equity or investment in the business, and may not be involved in speculation or investment.

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LowDoc Program

• One page SBA application to obtain guaranty. Once Hopewell Valley Community Bank has approved the loan request, completed applications are processed quickly by the SBA, usually within 36 hours.
• SBA guarantee of up to 85% for loans up to $150,000
• The use of proceeds is the same as for the 7(a) program, except proceeds may not be used to repay certain types of existing debt.
• To secure the loan, the borrower must pledge available assets; the SBA guarantee is not declined when inadequate collateral is the only unfavorable factor.
• Personal guarantees are required from all the principal owners of the business.
• Maturity depends on ability to repay; generally working capital is five to ten years; machinery and equipment, real estate, construction is up to 25 years (not to exceed the life of the equipment.
• To be eligible for the SBA LowDoc Program, your company must be a start-up or a business with $5 million or less in annual sales for the past three years; employ 100 or fewer; with good character and credit history.

A U. S. Small Business Administration guaranty enables us to make loans we might not otherwise make on our own. All of the SBA’s programs and services, as well as those provided by Hopewell Valley Community Bank, are provided to the public on a nondiscriminatory basis. Call Andre Caldini at (609) 466-2900 to discuss these programs with you.

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        Financing
        SBA Loans - Fueling the Growth of Small Businesses
        Trenton Business Assistance Corporation
        U. S. Department of Agriculture Business and Industry Guaranteed Loan Program