Understanding SBA Loans: A Guide for Small Business Owners

August 2, 2023

Are you ready to open doors to new possibilities? Whether you’re a startup, an established business, or somewhere in between, understanding SBA loans could be the key to unlocking new opportunities and helping your business thrive. New Valley Bank offers personalized service designed for local business owners just like you! We specialize in navigating the SBA loan process and are committed to helping small businesses access the financing they need to expand and grow.

What is an SBA Loan?

SBA loans are government-backed loans that aid small businesses. The Small Business Administration (SBA) partially guarantees SBA loans, which reduces lender risk, thus making it easier to secure financing.

Unlike traditional bank loans, SBA Loans may offer more flexible terms, reduced down payment requirements, and competitive interest rates, making them a desirable option for small business owners. The SBA loan programs are specifically designed to support small businesses in various industries and stages of growth, including start-ups and existing businesses.

How Does an SBA Loan Work?

SBA loans encourage lenders to provide loans to small businesses by offering a government guarantee. These loans are versatile and can be used for a variety of purposes, such as starting a new business, expanding an existing one, or purchasing essential equipment. The terms and conditions of SBA loans are sometimes more flexible than traditional loans and because of this can be a more accessible option for small business owners. Moreover, the repayment terms for SBA loans are typically longer, allowing for a more manageable repayment schedule.

Types of SBA loans

New Valley Bank works in coordination with the Small Business Administration (SBA) to offer the following types of loans:

  1. The 7(a) Loan Program 
    This program is the most common and versatile SBA loan program, providing financing for general business purposes such as working capital, equipment purchases, and real estate.
  2. The CDC/504 Loan Program
    The CDC/504 Loan Program helps businesses purchase or renovate real estate or acquire expensive machinery.

SBA Loan Eligibility requirements

To qualify for an SBA loan, businesses must meet certain criteria, such as:

  • Being a for-profit entity within the USA
  • Falling within the size standards per the SBA
  • Demonstrating repayment ability

To demonstrate eligibility, potential applicants may need to provide documentation like:

  • Business financial statements
  • Federal income tax returns
  • Personal financial statements
  • Business plans
  • Business projections
  • Other supporting documents

Our Vice President and SBA Lender, Donna Wheeler, can guide you through the requirements and help with the documentation needed for your application.

The Approval Process

New Valley Bank will evaluate your business’s financial health and ability to repay after receiving the application. They’ll also conduct a thorough analysis of your financial statements and supporting documents during the underwriting process.

After completion of the underwriting process, the SBA will also review your application. If approved, the SBA will provide a guaranty and you will be notified of your approval and the loan terms.

New Valley Bank: Your Partner for Understanding SBA Loans

New Valley Bank has a seasoned team that is capable and ready to guide small business owners through the SBA loan process. We assist business owners in maneuvering through the complexities, offering personalized assistance and unwavering support. By partnering with New Valley Bank, small business owners can tap into the resources they need to thrive and grow with an SBA loan. Contact us now to get started.

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Understanding SBA Loans: A Guide for Small Business Owners