SBA Loans Service Cleveland, OH

SBA Loans: Small Business Loans

The most frequently requested loan applications we process at Active Business Loans are SBA Loans. The SBA, or U.S. Small Business Administration, participates in a number of loan programs specifically designed for business owners who may have trouble qualifying for a traditional bank loan.  These business owners may need financing to buy a business, a business acquisition loan, or to start a new business, a start-up loan, to invest in growing their business – with working capital, buying equipment, purchasing property or investing in new processes or improvements and even to support small businesses that may have suffered from a disaster or economic injury to help recover and put them back on track.  In essence there are many types of SBA loans, which by most definitions, is a loan made by a financial institution that adheres to one of the SBA loan program criteria structured in a way that will guarantee the financial institution, or lender, a portion of the loan amount should the borrower default on the loan.  This SBA guarantee is what incentivizes the banks, and other lenders, to make loans that would typically be outside their risk tolerance.

What is an SBA Loan?

So the good news is that the SBA programs are very generous, can help small businesses that don’t have the best track record, the highest credit scores and may not have assets or collateral. Without the SBA guaranteeing the lender a portion of that loan if it defaults most small businesses wouldn’t qualify for the loans without the SBA programs.  The bad news is that the SBA does not make the loan.  It’s up to the lender to make the loan.  It’s up to the lender to make sure all the “i”s are dotted and the “t”s are crossed. It’s up to the lender to process the loan through their underwriting department to make sure it conforms to the SBA guidelines in order to get the guarantee. Unfortunately, at many local banks this has meant months and months of sending in paperwork, waiting, being asked for more loan documents, waiting and ultimately being told the loan isn’t compliant with SBA guidelines only to be rejected after sometimes up to 6 months!

Faster, More Efficient, Small Business Financing

At Active Business Loans our loan advocates are extremely dedicated to making sure your SBA loan goes through in a timely manner. We are extremely fluid in processing your SBA Loan application, dotting our “i”s, crossing our “t”s, anticipating underwriting stipulations before they get kicked-out and presenting the full SBA Loan package to our SBA lenders.  Unlike the local banks that are risk averse and mostly shell-shocked about small businesses defaulting on loans, we look for creative ways to make the loan work rather than reasons to decline the loan. Also, unlike the more conservative local banks, if a small business owner doesn’t meet the SBA Loan requirements, we can identify that immediately and suggest another multitude of loan options and programs that will still get our client the financing they need to buy a business, start a business or expand their business.

What offsets Active Business Loans from other financial institutions is that we can finance SBA Loans to a larger variety of businesses and do it well. The following is partial list of businesses that are financed through SBA Loans:

  • START-UP BUSINESSES
  • FRANCHISES
  • MEDICAL DOCTORS
  • CONVENIENT STORES
  • CPA & OTHER PROFESSIONALS
  • CONSTRUCTION COMPANIES
  • AUTO REPAIR
  • NURSING HOMES
  • GAS STATIONS
  • DENTISTS
  • VETERINARIANS
  • RESTAURANTS
  • HOTELS AND MOTELS
  • MANUFACTURING
  • INVESTMENT REAL ESTATE
  • SENIOR CARE FACILITIES

SBA Loans are Long-Term loans and are used in a variety of circumstances. Terms up to 7-10 years are used for working capital; up to 10 years for equipment; and up to 25 years on fixed assets, including real estate.

Funds can be used for commercial real estate, construction or renovation, purchase of machinery or equipment, purchase of furniture or fixtures, working capital, inventory, lines of credit, refinancing existing debt, and purchasing eligible businesses. 

THE PURPOSE FOR SBA FINANCING IS TO FUND FOR A START-UP BUSINESS OR TO EXPAND AN EXISTING BUSINESS.

Small Business Loans and Private Financing

Types of SBA Loans

Whether you’re planning to start a business or expand an existing business, SBA’s participation in a variety of loan programs is designed for business owners like you to get help with the financing you need. At Active Business Loans we work with private investors and national lenders that participate in all of the SBA programs, which include:

Basic 7(a) Loan Program

The SBA Advantage Loans 7(a) is the most common SBA Loan. These loans are guaranteed by the SBA to start-up a new business, acquire an existing business and help expand in existing businesses.  As with all SBA loans the lender, or bank, sets the interest rate, fees and terms and it’s the lender, or bank, that underwrites and approves the loan and provides the financing. There are two 7(a) loan process options – the SBA Advantage Loans 7(a) standard procedures and the SBA Express processing that expedites your loan.  Again it’s up to the financial institution you choose to determine which process options they choose. At Active Business Loans we prefer the more streamlined SBA Express to ensure your business gets the financing it needs when you need it!

SBA 504 Loan Program

The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. 504 loans are made available through Certified Development Companies (CDCs), SBA’s community based partners for providing 504 Loans.  504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing 10% of the project costs. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.

SBA Microloan Program

The Microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand.  The U.S. Small Business Administration provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. Microloans can be used for:

  • Working capital
  • Inventory or supplies
  • Furniture or fixtures
  • Machinery or equipment

Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.

One of the most popular loans for buying a business location is an SBA Loan.  Our Preferred Financial services process loans more efficiently and faster than our competition.

Who is Eligible?

The majority of small businesses can qualify for an SBA Guaranteed Loan.  Manufacturers, wholesalers, retailers, service businesses, and franchises are among the businesses that are included.  Professional practices such as Dentists, Veterinarians, Medical Professionals, and Attorneys are eligible for an SBA Loan.

Why Choose an SBA Loan?

  • Low Package Fees
  • Longer Terms
  • No Points
  • No Balloon Payment
  • Low Down Payment
  • Flexible Use of Proceeds
  • Commercial Real Estate Acquisitions
  • Construction or Refinance
  • Partner Buyout
  • Business Acquisition
  • Franchise Refinancing
  • Start-Up Businesses
  • Machinery and Equipment Purchases
  • Working Capital

Credit Qualifications

  • Borrowers must be active on a daily basis
  • Debt to net ratios must meet the industry’s averages
  • Business must have positive cash flow
  • Positive personal credit
  • No past bankruptcies or felony arrests