Traditional small business financing method offers attractive repayment terms.
Loans from the Small Business Administration are one of the most common forms of small business funding. Created to encourage banks to lend to small businesses, SBA 7(a) loans offer up to $5 million in capital, in addition to preferable repayment terms and multiple loan options. They’re ideal for entrepreneurs at all stages.
SBA loans can also be combined with other forms of financing to help your candidate reach their total funding needs. In fact, they can even use money from their retirement account to cover the down payment for an SBA loan with a Rollover for Business Start-up arrangement.
SBA loans can be used for almost any business purpose, including start-up, acquisition or expansion. Loan proceeds can be used as working capital, revolving funds, or to purchase real estate, equipment, inventory, etc.
SBA loans promise low interest rates, longer repayment terms and no ballooning costs, making monthly payments manageable.
Our average SBA client is funded in approximately 90 days, though the timeline can be affected by many factors, including site location, urgency to fund the loan and feedback from lenders.
We charge a $2,500 packaging fee per loan, including thorough document review and time to shop the loan to our large network of lenders.
The five “C’s” are important when assessing eligibility for an SBA loan. Generally, banks will look at a borrower’s:
- Cash: 20 percent equity injection needed for an existing business; 30 percent for a start-up.
- Credit: 640+ credit score.
- Capacity: Secondary income is preferred to minimize the risk of default.
- Character: Three years of applicable work experienced is preferred.
- Collateral: Personal collateral is required for a traditional SBA loan.
Why use Guidant for your candidate’s SBA loan?
Guidant has developed a proprietary pre-qualification process in order to quickly understand if candidates are qualified for an SBA loan — before they even fill out an application. This process involves a soft pull of their FICO and SBSS scores via the bQual tool.
Secondly, we partner with 3,600 of the best lenders nationwide to make the likelihood of securing an SBA loan with preferable terms even more likely. We’re so confident in our process that we offer your candidates a 100 percent money-back guarantee, meaning there’s absolutely no risk for you or your candidates if they’re not approved.
Franchise: Spice & Tea Exchange
Loan amount: $232,000
Equity Injection: $108,400 [401(k) rollover]
Highlight: After careful collaboration with the franchisor and a bank, we were able to secure funding for the client, despite issues that would normally disqualify them immediately.
Franchise: Apricot Lane Boutiques
Loan amount: $211,500
Equity Injection: $90,000 [401(k) rollover + cash]
Highlight: Lender reviewed and underwrote the deal in less than 24 hours!