Grow your business in 2020

Santa Clarita Valley Business Journal
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Where do you want to take your business in 2020? If you’re a small business owner, now may be the time to consider financing as interest rates remain favorable. Because financing programs are varied — and the qualifications for each are specific — take time to work with an experienced SBA Lender to understand how the programs work.

The SBA provides several financial assistance programs designed to meet key financing needs making it possible for qualified businesses to get the financing they need, often times with more flexible terms than conventional loan options.  The most common and broad reaching are the Guaranteed Loan Programs, which facilitate debt financing. 

SBA does not make loans directly. Rather, it sets guidelines for these loans, which are then made by lending partners. When a business applies for an SBA loan, it is applying for a commercial loan that is structured according to SBA requirements. Note that SBA loan guaranty requirements and practices can change as the government alters fiscal policy and priorities to meet current economic conditions. 

Qualifying for an SBA loan may be easier than qualifying for traditional forms of financing, as the SBA programs generally allow for a higher loan to value ratio, longer amortization periods, and may consider the projected income of the business and not just historical cash flows when making a credit decision. These factors can be extremely helpful, particularly to a rapidly growing company. 

When purchasing, refinancing, or renovating commercial real estate, borrowers should take a close look at the SBA 7(a) Loan Program. This program offers borrowers up to 90% financing for the purchase of owner/user (defined as a minimum of 51% of total occupancy) commercial real estate, fully amortized with no balloon payments. With a maximum loan amount of $5,000,000 and terms up to 25 years, it could serve as a real solution to many borrowers.

SBA 7(a) loans can also be used for acquiring fixed assets, such as heavy machinery or other equipment, restructuring current debt, working capital and in some cases can even be used to fund the acquisition of a new business. 

Visit www.sba.gov or www.MissionValleyBank.com to learn more.

Ryan Roques is Vice President of SBA Business Development at Mission Valley Bank, a locally-owned, full-service, independent, commercial bank with Preferred SBA Lender status serving the San Fernando and Santa Clarita Valleys. He can be reached at (310) 997-6001.
MissionValleyBank.com

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