Small Business Administration [SBA]
The U. S. Small Business Administration (SBA) is a federal government agency headquartered in Washington DC that provides resources, programs, guidelines, and small business loan guarantees to approved SBA Lenders to issue loans to small businesses.
The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, and grow their businesses successfully. The SBA is not a lender. The Small Business Administration provides a guarantee that gives the approved SBA lender the ability to take on the risk of lending and decisions under SBA term’s that they would not ordinarily do so on their own and has all rights reserved for any recourse need.
SBA loan application processes can be lengthy, but with the help of an experienced, SBA-approved lender to help your funeral home business through the applications process so the Small Business Administration application package can be a smooth and efficient experience. Some loan products require commercial real estate as collateral.
SBA Product Overview:
Loan Amount Limits: Up to 10 million
Interest Rates: Starting at 3.50%, treasury index plus 1% to 2.5%
Loan Terms: 3 to 25 years
Fees: Origination fees 0% to 3%
Payments: Fixed monthly
Credit: Good to excellent credit score required
Application Process: SBA loan application, business assets, and numerous financial statements
U. S. Small Business Administration Loan Programs:
SBA Standard 7(a) – SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to businesses with a good track record. This loan is used mainly in the funeral home industry for working capital, expansion, and business acquisitions.
SBA 504 – The SBA 504 Loan is a small business term loan and a powerful economic development loan program that provides businesses another avenue source for funding while promoting economic development and equity. SBA 504 is typically for significant capital needs like real estate transactions.
The use of proceeds from the SBA 504 Loan must be used for fixed assets such as construction, owner-occupied commercial property, or mixed-use real estate. Common uses for SBA 504 loans include; repair facilities, land improvements (and certain soft costs), growth, and expansion, or can also be used to refinance existing debt on your small business.
SBA Disaster Small Business Loan Program – SBA Economic Injury Disaster Loans (EIDL) – This type of SBA loan assists small businesses after natural disasters like tornadoes, wildfires, or floods, and also when Coronavirus (COVID -19) was declared a nationwide health emergency. Congress provides small businesses with access to relief options through this SBA loan for emergency funding.
SBA Paycheck Protection Program (PPP) – The Small Business Administration (SBA) has established the SBA Paycheck Protection Program (PPP loan) in response to COVID-19. This is one of SBA’s relief options that provides loans to small businesses affected by the Coronavirus (COVID-19) crisis and needs financial help.