By Ted Lauer, Access National Bank

What do FedEx, Nike, Jenny Craig, Gymboree, Outback Steakhouse and Staples have in common? These notable companies have all been financed with U.S. Small Business Administration (SBA) programs.

If you own or lead a small or mid-size company, you understand all too well how the credit crisis has dried up loan opportunities for smaller, less established businesses. This has made SBA-backed loans an important lifeline to small businesses.

The SBA guarantees bank loans made to small businesses will be repaid. Through the SBA, the federal government decreases some of the risk to financial institutions so they are more likely to loan to small businesses. In addition to its primary 7(a) Loan Program, other SBA programs include CDC/504 and financing via the SBIC program.  

As part of the American Recovery and Reinvestment Act, the federal government lowered fees and increased the amount of small business loans it guarantees for banks. In fact, a few weeks ago, Congress passed an $18 billion jobless bill, which includes $80 million to extend SBA loan breaks established by that Act. This extension allows for higher guarantee levels on 7(a) loans from 75% to 90%. This upgraded guarantee allows even more bankers to provide loans they typically would reject. It also waives borrower fees on most 7(a) and 504 loans.

However, these ever-changing loan and investment program rules prove difficult to understand. Business leaders often question:

  • How to combine conventional bank financing, a 7(a) loan, and an SBIC investment to meet a complete funding requirement?
  • What are the Eligibility standards for each of the SBA programs?
  • What are the rate and structure advantages of the various SBA programs over conventional bank financing?

On Tuesday, May 18, ACG National Capital’s seminar series will focus on “Funding Organic Growth and Acquisitions with SBA programs – 7(a) Loans and SBICs.” To register for this event, click here. You will hear from a knowledgeable, well-rounded panel, including: 

If you are looking for additional capital to help grow your businesses, now is the time to learn more about SBA loan programs. 

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