The borrower completes one page of the SBA’s application and the lender completes a second page.
The lender submits a complete application to the SBA and receives an answer within 36 hours.
The NEW SBA LowDoc allows lenders to take advantage of electronic loan processing.
INTEREST RATES
Interest rates can be negotiated between the borrower and lender, may be fixed or variable, are tied to the prime rate (as published in the Wall Street Journal), and may not exceed the following SBA maximums:
2.25 percent over prime for loans of less than seven years, and
2.75 percent over prime for loans of seven years or longer.
Loans under $50,000 may be subject to slightly higher rates.
COLLATERAL
To secure the loan, the borrower must pledge available assets; generally, loans are not declined when inadequate collateral is the only unfavorable factor. Personal guaranties of the principals are required.
MATURITY
Length of time for repayment depends on ability to repay and the use of the proceeds. Maturity generally is five to ten years. For fixed asset loans, maturity can be up to twenty-five years.
ELIGIBILITY
A business is generally eligible for the NEW SBA LowDoc loan if:
the purpose of the loan is to start or grow a business;
the existing business has an average annual sales for the preceding three years not exceeding $5 million, and the business employs no more than 100 people, including affiliates;
the business and its owners have good credit; and
the business owners are of good character.
More SBA loan information can be found at www.sba.gov