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By Heritage Bank on August 25, 2023
2 minute read

A Guide to SBA Loans & Preferred Lenders

Are you a small business owner looking for affordable financing options? You may have heard about Small Business Administration loans, but did you know that there are SBA-preferred lenders?

What is an SBA Preferred Lender?

SBA-preferred lenders earn that designation through a track record of assisting small businesses with SBA loans and providing high-quality service.

There are several advantages to working with an SBA-preferred lender:

        • Faster loan processing times
        • More flexible loan terms
        • Access to specialized SBA loan programs

Additionally, SBA-preferred lenders may be more willing to work with small businesses with less-than-perfect credit or limited collateral.

SBA Loans: Definition

The Small Business Administration is a government agency created to support small businesses in the United States. The agency’s loans are designed to provide funding for a range of small business scenarios, from start-ups to established businesses with various financing needs, including:

        • Working capital
        • Equipment purchases
        • Real estate investments

SBA loans are typically offered with lower interest rates and longer repayment terms than traditional bank loans, making them a popular choice among small business owners.

Who Qualifies for an SBA Loan?

You must meet specific eligibility requirements to qualify for an SBA loan. You’ll need a strong credit score, a solid business plan and financials showing you can repay the loan.

Other qualifications include:

        • You must be a "for-profit" business.
        • Your business must be officially registered.
        • Your business must be physically located and legally operating in the U.S. or U.S. territories.

 There are specific size standards set by the SBA. In addition, you cannot use loans from other financial institutions at the same time you are using SBA loans.

For a complete list of qualification requirements, visit the SBA website.

Do SBA Loans Need to Be Paid Back?

Yes, SBA loans do have to be paid back. These loans are meant to be a source of financial assistance for small businesses, but they are not grants or gifts. The repayment terms will depend on the loan agreement, but generally, borrowers must make regular payments over a set period.

It's important to carefully review the terms of any loan before accepting it and to make sure you have a solid plan for how to repay it.

How to Choose the Right Lender for Your Business

Choosing the right lender for your business is a crucial decision that can impact your ongoing financial success.

Before making a decision, consider factors such as:

        • Interest rates
        • Fees
        • Experience in your industry
        • Level of personalized service

It may also be helpful to read reviews and ask for recommendations from other business owners in your network.

Ultimately, the right lender will understand your business goals and can provide the financing and support you need to achieve them.

The Right Local Bank Makes All the Difference

Heritage Bank is proud to be an Authorized SBA Express Lender. If you're a business owner in need of flexible financing, we invite you to contact us today! Our team of experienced SBA bankers can guide you through the loan application process and help you secure the financing you need to grow your business.

You can email or call our lenders directly to get the process started.

Published by Heritage Bank August 25, 2023