When you reach that point in business when you need a loan, you face two daunting tasks. The first is learning how to apply for the loan. The second can be even tougher -- finding a bank that knows how to get the loan done quickly and efficiently. Here is the good news: You came to the right Small Business Finance website.
- What is the Small Business Administration (SBA)?
The Small Business Administration is a federal agency that supports small business owners and their business goals. The SBA offers a variety of resources for small business owners and entrepreneurs, including counseling, education, and financing programs.
To learn more about the SBA, visit their website.
- What is an SBA loan?
SBA loans are government-guaranteed loans for small business owners with long-term financing needs. Many common uses for SBA loans include business acquisition, expansion, ground-up construction, purchase of commercial real estate, debt refinance, and more. Depending on your needs, SBA loans can be a good alternative to traditional small business loans.
- Does the SBA provide these loans?
No, in general the Small Business Administration does not issue loans directly to small business owners. Instead, they guarantee loans that are issued by a partner lending institution, like FNB Small Business Finance. Since SBA loans are backed by the U.S. government, they often come with unique benefits that might not be available through conventional lending. In times of natural disasters SBA does have direct loan programs available.
- What types of SBA loans are available?
The two main loan products we offer are SBA 7(a) loans and SBA 504 loans. The SBA 7(a) loan product is the most popular offering, as proceeds can be used for a wide variety of business purposes. Common needs include business acquisition, expansion, partner buyout, start-ups, and the purchase of commercial real estate. The SBA 504 loan product is typically used for financing fixed assets, including ground-up construction, commercial real estate, furniture, fixtures, and equipment. Both loan products can also be used for debt refinancing.
An SBA Express Loan is often used as a Working Capital Line to manage cashflow in the business. At FNB Small Business Finance we often pair an Express Loan with a 7(a) or 504 loan to maximize the flexibility of the financing package. We do not offer the SBA Express Loan as a stand alone product.
- What are some of the common benefits of an SBA loan?
SBA loans offer many benefits compared to traditional small business loans, including lower down payments, longer loan terms (10-25 years), flexible pre-payment options, and competitive terms. The proceeds of an SBA loan can also be used for many business needs, so you aren’t required to take out multiple loans for your project. For example, one SBA loan can cover the purchase of a business and commercial real estate as well as furniture, fixtures, equipment, and working capital.
At FNB Small Business Finance, we are pleased to offer 8 different rate structure options for our SBA loans to manage rate volatility. Our borrowers can choose the rate that works best for them, including 3- and 5-year fixed and quarterly variable rates.
- What loan amount can I achieve through an SBA loan?
SBA 7(a) loan amounts go up to $5,000,000. With an SBA 504 loan, you can finance projects up to $10,000,000, sometimes more. The total amount you can borrow will depend on your needs for the loan.
- Is collateral required for an SBA loan?
SBA loans often require personal collateral from guarantors to back the loan. SBA requires Lenders to look to personal collateral if the loan is not fully collateralized by assets of the subject business. Any owner of 20% or more of the subject business is required to provide an unlimited personal guarantee. However, if a business is lacking in collateral but maintains proper cashflow, the Lender may choose to move forward with the loan.
- How do I qualify for an SBA loan?
- Operate a for-profit business
- Be a U.S. citizen, or have a green card giving you eligibility to be legally in the U.S. for the term of the loan
- Be engaged in, or propose to do business in, the U.S. or its territories
- Have reasonable owner equity to invest
In order to qualify for an SBA loan, a business owner must:
There may be some additional requirements depending on the situation. For a full list of requirements, please visit the SBA website.
- How do I apply for an SBA loan?
To apply for an SBA loan with FNB Small Business Finance, please reach out to one of our experienced Business Development Officers (BDOs). The BDO will take the time to learn about your business goals and loan needs in order to customize a financing solution that works for you and will guide you through the application process.
- What do I need to get started?
- A business plan
- A personal financial statement from all owners of 20% or more of the business
- List of all current business debts and respective monthly payments
- Three years of personal and business tax returns
- Year to date Income Statement and Balance Sheet (if existing business)
- Spreadsheet of the Total Project Costs and how the money will be used
At the beginning of the SBA loan application process, you will need to provide your BDO with several documents, including but not limited to:
Your BDO will give you guidance on other materials you may need, or request additional information from you. Read our blog post to learn more.
- How long does the process take?
There are many factors that can impact how long the SBA loan process will take. For the loan process to run as smoothly as possible, it is important to keep in constant communication with your BDO and provide them with the information they require in a timely manner. Your BDO will provide you with checklists throughout the process in order to stay on track.
Once all required information is received for application, average turnaround time to a credit decision is 7-10 business days.
Due to our Preferred Lender Status with the SBA, our average turnaround time is 45-60 days once commitment is issued to close.
- How do I know where I stand during the loan process?
Your Business Development Officers will stay in touch with you throughout the loan process. You will always be just a phone call or email away from information about your loan. For more information on how the loan process works, click here.
- What is an SBA Preferred Lender, and what does it mean for me as a small business owner?
FNB Small Business Finance is part of the SBA’s Preferred Lender Program (PLP). This designation is given to SBA lenders who have demonstrated expertise in SBA lending and have successfully closed many loans. With our PLP status, we are able to approve the loan on behalf of the SBA, so you can access the capital you need without long wait times.
- What states do you lend in?
FNB Small Business currently lends to small business owners in 31 states and Washington, D.C. To view a map of our lending footprint, visit our About Our Team page.
- Do you provide SBA financing for franchises?
We provide SBA financing for franchise concepts that are deemed eligible by the SBA’s standards. For a current list of franchises that the SBA supports, reach out to one of our experienced Business Development Officers (BDOs).
- Does FNB Small Business Finance do Construction Loans?
Yes we do, including projects from leasehold improvements to ground up construction. Our experienced Construction Loan Managers will work with you and your contractor to understand the funding process and insure a successful completion of your project.
- Why don't other banks tell us about the advantages of SBA?
Navigating the SBA lending process requires specific knowledge and expertise. Our team is well versed in the SBA program and has achieved Preferred Lender Program status due to our long track record of successfully closing SBA loans. SBA loans are all we do at FNB Small Business Finance. Many other banks haven’t made the same investment. They will tell you it takes too long or there is too much red tape involved. Not when you're working with the experts at FNB!
