Business Banking

5 Questions to Ask When Considering an SBA Loan

5 Questions to Ask When Considering an SBA Loan

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commercial lending Small Business Administration SBA SBA Preferred Lender Commercial Lender SBA Loans

The United States Small Business Administration (SBA) works with lenders like The Bank of Elk River to provide loans that allow small businesses to start or expand operations. Some benefits of an SBA loan include competitive terms, lower down payments, flexible overhead requirements, and continued support through counseling and education. Loans guaranteed by the SBA vary in size up to $5,000,000 and can be used for most business purposes, including purchasing inventory or equipment, refinancing other debts, or buying real estate. Here are 5 questions to ask when considering an SBA loan.

Do you lend to similar businesses in my industry?

It’s important for a potential lender to thoroughly understand the unique characteristics of both your industry and your company’s place within that industry. Some lenders work only within specific industries, so be certain that the lender can offer assistance before you take the next step.

Which SBA loan is right for my business?

The SBA offers a variety of loan programs designed to serve a wide range of businesses. A lender should discuss with you and understand your business plan, growth opportunities, and financing needs to determine which program is best for your company.

What is your level of SBA Authority?

A bank or other lender must be authorized by the SBA, which dictates the loan process itself and the amount of time that process takes. A lender identifying as an SBA Preferred Lender is typically able to offer a streamlined process, expediting loan approval and other decisions.

How long does the loan process take?

The amount of time required for the loan process depends on the type of loan and amount requested as well as the lender’s SBA approval level. An SBA Preferred Lender does not require authorization from the Small Business Administration to approve a loan.

How many SBA loans do you process in a typical year?

A low volume of SBA loans can indicate limited experience. However, no matter the number, you should ask the lender for references. Other business owners who have worked with the lender can provide valuable information and insight.

The Bank of Elk River is a certified SBA Preferred Lender. We offer a variety of SBA loans, including the 7(a) Loan Program for larger projects, the CAPLines Loan Program for cyclical working cash flow needs, the SBA Express Loan Program for smaller loan requests, and the 504 Loan Program, used to purchase real estate or larger pieces of equipment. Contact one of our experienced commercial lenders today to learn which SBA loan option is right for your business.

Member FDIC. Equal Housing Lender. NMLS #495076.

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