FAQs
 
 
10 FACTS ABOUT WEALTH, BUSINESS, AND THE SBA


  1. According to the Bureau of Labor and Statistics only, 1% of the U.S. population retires `wealthy.' 4% retires financially `well off.' The rest must continue to work or rely on Social Security income. Business owners rank in the top 5%.
  2. SBA has been providing financing since 1953...50 years of serving the business community.
  3. NIKE, FEDEX, APPLE, AOL and COMPAQ all got their start with an SBA loan.
  4. Contrary to popular opinion, most businesses do not fail in the first 5 years ... it generally happens in years 8 and 9.
  5. 80-90% of all SBA borrowers are still in business after 10 years.
  6. Over 50% of all long-term financing in California is SBA.
  7. Over 30% of all the long-term financing in the nation is SBA
SBA FAQS

There are a lot of misconceptions about SBA loans, some of them over 40 years old. If you have a question about SBA or think you can't get this type of loan, don't let old or inaccurate information about this valuable financing tool stop you. Here are some common misconceptions/questions about SBA loans:

Q. I'm starting a business but I don't have enough personal capital.
A. An SBA guaranteed loan can provide $2.00 for each $1.00 you invest.

Q. I need working capital for inventory and receivables.
A. An SBA guaranteed loan can provide 100% of your capital requirements, payable over 10 years.

Q. I need equipment and machinery plus tenant improvements for my space.
A. An SBA guaranteed loan can assist with up to 100% financing of your heavy asset needs, payable over 10 years or more.

Q. I want to buy a building for my business. Opportunities are really good right now to buy real estate, but I don't have 30% down.
A. An SBA guaranteed loan can provide 25-year financing with as little as 10% down or less in some cases. Build-to-suits are just as eligible as existing buildings.

Q. My equipment/building note is due. Can I refinance the loan?
A. In many cases, an SBA guaranteed loan can be used for refinancing of your notes. If your rate is particularly high, the SBA loan could be at a lower rate and cut your monthly payments.

Q. Do I have to be turned down by two banks to get an SBA loan?
A. No. SBA guaranteed loans are bank loans. They are guaranteed by the SBA. The SBA does not make loans directly.

Q. Do I have to be some sort of special category of business owner to get an SBA loan?
A. No. SBA is open to virtually all business owners, regardless of race, gender, national origin, etc. SBA is encouraging women, minorities, veterans and exporters to participate in their programs.

Q. I heard that SBA has run out of money before. Will that happen to me?
A. SBA has experienced `temporary shortages' of funding, thus slowing down the process. It is important to note that these shortages were short term in duration. The SBA does get allocations in the budget, so keeping your Senator and Congressman aware of the & importance of SBA is vital to the program.

TOOLS TO GET THE BEST RATES AND TERMS

There are over 40 SBA lenders in San Diego. How do you choose the best for you? If you've been contacted by a lender before or during the loan packaging and application process, ask the questions below. The answers should tell you if the lender is one who can help.

  1. How many loans have you done for a business like mine?
  2. What is your success rate in approving loans for a business like mine?
  3. How quickly can you process this request from start to close?
  4. What is your standard pricing, rates, terms and conditions for a loan like mine? (Ask about the type of loan .... real estate or non-real estate?)
  5. Do you offer 7a and 504 loans? Are your rates fixed or variable?
  6. What is your ranking against your competitors?
  7. How many loans have you processed this year? In the last five years?
  8. What is your volume of SBA loans so far for this year?
  9. How many years have you and your lenders been doing SBA loans locally?
  10. Are you a Preferred, Certified or General SBA lender? Do you know the difference?

Let me know how local lenders respond to your questions. If you like the lenders' answers, we can send a package to them. FRANCIS FINANCIAL offers the competitive edge in SBA loan brokering.

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