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SBA Loans for Small Business

SBA Loans for Small Business
SBA Loans for Small Business

The SBA (Small Business Administration) does not make direct loans to businesses. Instead, the agency sets guidelines and partners with banks, credit unions, and other financial institutions to provide loans to small business owners. Therefore, as a borrower, you are not borrowing from the SBA but from a financial institution like Customers Bank.

Customers Bank is a proud SBA-preferred lender that serves small business owners with comprehensive funding solutions. SBA loans have several advantages for small business owners, including competitive terms and flexible lending requirements.

The SBA has certified specific lenders to streamline the process of servicing the agency’s guaranteed loans. These lenders are called SBA-Certified Lenders and can use their application forms and documentation, but the SBA still has the final say on loan approval. Because SBA-Certified Lenders have already completed much of the agency’s work, the SBA offers a faster turnaround time of three business days for application processing.

The top designation for borrowers and lenders is SBA-Preferred Lender status. These high-volume lenders have processed and serviced SBA loans efficiently for many years. They have extensive experience in SBA policies and procedures. Lenders with SBA-Preferred Lender status, like Customers Bank, have the authority to make final decisions on most SBA loans and can sometimes offer a one-day turnaround on completed loan applications.

What types of SBA loans are available?

SBA loan programs are designed specifically for small businesses that do not have access to other kinds of financing. Here are some loan programs that may work for your business.

  • SBA 7(a) Loans: For startups and existing small businesses, SBA 7(a) loans can be short- or long-term and generally have low-interest rates. The program includes several types of loans, so speak with a Customers Bank SBA loan expert to decide which type of loan your business may need. 
  • CDC/SBA 504 Loans: Under a CDC/SBA 504 loan, you can get long-term financing up to $5 million for purchasing, building, or renovating owner-occupied commercial real estate or purchasing other fixed assets. Two lenders are paired to fund the project: a bank or traditional lender and a community development corporation (CDC). CDC/SBA 504 loans require the business to occupy at least 51% of the commercial space. 
  • SBA Microloans: The SBA Microloan program is designed for nonprofit lenders to lend to small for-profit businesses and nonprofit childcare centers. They are similar to conventional business loans but are typically limited to a maximum of $50,000. They often have lower interest rates, flexible terms, and fewer fees than other loans. 
  • Disaster Loans: These SBA loans are for businesses negatively impacted by a declared physical or economic disaster.

Final Thoughts

SBA loans offer many advantages for small business owners, including lower down payments, low-interest rates, and longer repayment terms. As an SBA-preferred lender, Customers Bank guides small business owners through the different loan options, recommends the best financial vehicle for their unique situations, and helps with the application process. We can provide the capital and support you need to achieve success. Contact us to get started.