SBA Loans & Finance Consultants

At The Project Corporation I wont spend time on a deal that does not answer my initial questions in clear concise detail and provide a current balance sheet. You can set your own parameters.

Finance Consultants should target specific industries looking for transactions that meet SBA guidelines. Targeting will assist the Consultant in pursuing real deals. The SBA offers numerous loan programs to assist small businesses. It is important to note that the government does not make the loan. The SBA is a guarantor of loans made by lending institutions. With the SBA guarantee, Lenders can offer longer terms, no points, and no balloon payments.

Who is Eligible for an SBA Loan?

Most for-profit small businesses are eligible for an SBA guaranteed loan. This includes manufacturers, wholesale, retail and service businesses as well as independent, or franchise businesses.

SBA Loan Qualifiers:

Wholesale businesses with employees up to 100 regardless of sales volume

Manufacturers with employees up to 500 depending on the industry, regardless of sales volume

Retail and service businesses with a sales track record (sales volume: 3-year average not exceeding $6 million to $20 million, depending on the industry.)

SBA Lenders:

Banks on many city corners where most of us have checking and savings accounts are of course obvious choices of lenders. These are considered "retail" banks. Bank branches may be able to approve loans up to $200-250,000. Funding request for more than that will usually be sent to the corporate office.

Besides the traditional "retail" banks there are many lending institutions, which do SBA loans. These can be mortgage banks, investment banks, and commercial loan companies. These commercial lenders deal with money and specialize in specific financial areas, but they are not your standard bank on the corner.

Retail banks are regulated by both state and federal agencies making their parameters a little more rigid than other lending institutions, which dont have the same regulatory controls to contend with. These other institutions may be more aggressive in funding a transaction for you.

All lenders dont handle transactions in the same manner, so Consultants should contact various banks and get the parameters of each bank. Contact your local banks, national banks, insurance companies, investment banks, etc. Find lenders that provide SBA guaranteed loans. Learn from these various sources. Ask what they are looking for in the Clients documentation package. Get their loan applications. Do they target specific industries? Are the hungry for certain types of deals? Outline for picking a Lender to work with.

Consulting Fees:

Some lenders will pay a "Finders Fee." Some wont. Finders Fees are typically 1 of the total loan amount. There are times that the lender will dictate the total amount allowed, and if the Consultant wants to get the deal funded they will have to accept what is allowed. Consultants will need the Client to sign an Engagement Agreement stating the services being rendered and the amount to be paid.

There are thousands of deals for you to pursue. Stick with the real deals. Let the daydreamers go.

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We have international subscribers to the Business Funding Secrets Newsletter. This months article is based on a U.S. government guarantee loan program here in the U.S. We apologize to our readers that dont have access to these programs. In future articles we will discuss International Financing, and other topics relevant to our International readers.