SBA Loans FAQ
Frequently Asked Questions
We have created a reference for common questions regarding Small Business Association (SBA) Loans. If you still would like to learn more about our loan options, feel free to contact us today and get your application started.
What are SBA Loans?
U.S. Small Business Association (SBA) loans are actually loans from your chosen SBA approved bank or lender, like Sentry Bank. These banks and lenders are able to provide loans to small businesses which would normally be too risky to loan to, because the SBA helps guarantee the loan.
SBA loans are usually given at lower interest rates and with fewer conditions than traditional bank loans, due to the guarantee from the SBA.
These loans are typically only given to cover the following types of small business expenses: accounts payable, inventory, operating expenses, purchasing/modifying land, purchasing/constructing buildings, long-term machinery/equipment, and some other uses.
What Types of SBA Loans Does Sentry Bank Offer?
There are two types of SBA loans which Sentry Bank offers.
7(a) SBA loans are the most popular type of SBA loan, and are often utilized by new businesses. They typically have a maximum loan amount of $5 million. There is no minimum. The average loan amount for FY 2015 was $371,628.
7(a) loans are usually used for accounts payable, inventory, operating expenses, purchasing/modifying land, purchasing/constructing buildings, long-term machinery/equipment, and some other uses.
The SBA can guarantee up to 85% on loans of up to $150,000, and 75% on loans greater than that.
SBA CDC/504 (Certified Development Company) loans are usually used by expanding businesses. They typically have a maximum loan amount of around $5-5.5 million.
CDC/504 loans can be used for purchasing/modifying land, purchasing/constructing buildings, long-term machinery/equipment, and some other uses.
What Are The Eligibility Requirements?
One of our bankers can help you determine whether you are eligible for SBA loans, otherwise you can look at the requirements for
7(a) loans here and CDC/504 loans here.
Besides the requirements at the above links, banks and lenders will also look at your business’ cash flow, collateral, equity investment and credit.
Clicking on the links above will open new windows and bring you to third-party websites.
How Do I Apply For An SBA Loan?
Both the 7(a) and CDC/504 loans have their own eligibility criteria and application process, as can be seen above.
You can be prepared for the application process before you meet with your lender by gathering your personal and business financial statements, tax returns, collateral documents, articles of incorporation (if an existing business), resume and business plan (if starting a business) and more.
Clicking on the link above will open a new window and bring you to a third-party website.
Why Choose Sentry Bank For My SBA Loan?
Sentry Bank is a preferred SBA loan partner as part of the Preferred Lender Program (PLP). We are better able than other area banks to streamline the application process for you.
Because we are part of the PLP, the final credit decision, as well as servicing and liquidating authority rest with us rather than the SBA.
The SBA has trusted us because of our high level of experience in dealing with SBA loans.
If you have any questions about the SBA loans process, contact us and we will help guide you through the process. For more information, head to our business loans page.
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