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Ten Frequently-Asked Questions about SBA
Loans
1. What is the purpose of the
Small Business Administration (SBA)?
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Congress created the Small Business Administration in 1953 to help
America’s entrepreneurs form successful small businesses. The SBA
enables its lending partners to provide financing to small businesses
on reasonable terms by guaranteeing major portions of loans made to
small businesses.
2. Do I qualify for an SBA loan under the current
guidelines?
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Yes… if your business is:
- A For-Profit Organization (other loan
programs are available for non-profit organizations)
- Independently Owned
- Not Exceeding the Following Maximum Size
Standards
- Manufacturing…varies by industry from
500 to 1,500 employees
- Wholesaling…up to 100 employees
- Service…varies by industry from $5.0
million to $25 million in revenue
- Commercial Real Estate
- Must be 51% occupied by your business if
you are purchasing the building
- Must be 60% occupied by your business if
you are constructing the building
3. What are the advantages of
an SBA loan?
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The SBA loan program offers:
- Up to 90% Loan to Collateral Value
- Longer Repayment Periods—up to 25 Year
Terms for Real Estate
- No Prepayment Penalties for Loans up to 15
Year Terms
- No Balloon Payments
4. What purposes can I use an
SBA loan?
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You can finance:
- Working Capital
- Inventory Purchase
- Machinery & Equipment
- Furniture & Fixtures
- Commercial Real Estate
- Purchase
- Improvements
- Construction
- Any combination of the above can be made
as one loan
- Acquisition of an existing business
5. What are the loan amounts
and interest rates charged?
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Our lending experts can make it easy for you to obtain the funding you
need. We offer:
- Loans from $50,000 to $2,500,000
- Negotiable rates
- Adjustable and fixed rates
Interest rates vary depending on the type of
SBA loan you are applying for. Contact the
SBA
Loan Office for more information
6. Do I need to put up collateral to obtain an SBA
loan? What is eligible?
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Yes. Eligible collateral includes personal and/or business real
estate; equipment, inventory, and accounts receivable; and personal
guarantees of all major stockholders (20%+).
7. How long can I take to repay an SBA loan?
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The following applies for repayment terms:
- Working Capital & Inventory—up to 7 years
- Machinery & Equipment—up to 10 years
- Commercial Real Estate—up to 25 years
- A loan that combines two or more of the
above purposes will have a weighted average maturity.
8. What would disqualify me
for the SBA loan program?
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If any of the following items apply to you, it will not be possible
for you to obtain an SBA loan. However, there may be other reasons
than listed below that would preclude you from obtaining an SBA loan,
e.g., your business doesn’t qualify as a small business. If you’re
unsure,
call or
e-mail
a First Northern Bank SBA Lending Expert today.
Listed below are guidelines that could disqualify you for SBA
financing:
- I am not a U.S. citizen and do not have an
alien registration card.
- I do not independently own My business
(the business has other owners who will not be part of the
application).
- I own a not-for-profit business.
- My business exceeds the SBA size
standards.
- My business (or proposed business) is
engaged in gambling activities.
- I am currently on parole or probation.
- My loan would allow for speculation in any
kind of property.
- My business engages in lending.
- My business is not available to the
general public (enforces restrictive patronage).
- My business or I have defaulted on a
previous Federal Government debt (including student loans).
9. How do I apply for an SBA
loan from First Northern Bank?
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Applying for an SBA Loan is easy at First Northern Bank, simply:
- Print and complete our
SBA Loan
Application and send it along with the applicable
financial information to one of our SBA Loan Offices
- Contact one of our convenient
SBA
Loan Offices to obtain a loan package.
- Stop by a First Northern Bank SBA Loan
Office between 8 a.m. and 5 p.m., Monday-Friday, to talk to an
experienced SBA loan representative.
- Stop by any First Northern Bank location
for an application.
10. What else does the Bank
need to begin My loan?
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Along with the completed loan application, please bring or mail the
following to one of our SBA Loan Offices:
- Current company financial statement--less
than 45 days old
- Previous 3 years company financial
statements and tax returns
- Personal financial statements and previous
3 years tax returns from all major stockholders (20%+)
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