SBA Loans

SBA loans are designed for businesses that are looking to finance any of the following: start-up, acquisition, remodel, expansion, succession, real estate purchase/construction, equipment, leasehold improvements, inventory & working capital, franchise fees, or debt refinance. We offer a full range of commercial banking products to complement SBA lending solutions and our experienced SBA Loan Officers will guide you through the eligibility requirements to determine if an SBA loan is right for your business.

Visit with an SBA Lender today by contacting your local branch.

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Unlocking Business Ownership: Using SBA Loans to Purchase a Business

Thinking about diving into entrepreneurship but unsure where to start? Purchasing an existing business using an SBA (Small Business Administration) loan can be a smart, accessible way to become a business owner—even if you’re new to investing. Here’s what you need to know:

Why Use an SBA Loan to Buy a Business?

Unlike traditional loans, SBA loans often rely heavily on the financial strength and history of the business you’re purchasing, rather than solely on your personal credit and assets. This means the business’s established success can help secure your financing, even if you don’t have extensive business ownership experience or substantial collateral.

Key Advantages of SBA Loans:

  • Lower Down Payments: SBA loans typically require lower upfront investments, sometimes as low as 10%.
  • Favorable Terms: These loans offer competitive interest rates and longer repayment terms, easing your monthly financial burden.
  • Focus on Business Performance: SBA lenders primarily evaluate the existing business’s profitability, cash flow, and growth potential.

What Types of Businesses are Ideal for SBA Loans?

If you’re new to investing in businesses, consider these options that typically align well with SBA financing:

  • Established Franchises: Proven business models with strong support systems.
  • Businesses with Recurring Revenue: Such as subscription services, maintenance businesses, or professional services with steady client bases.
  • Retail and Food Services: Restaurants, cafes, and retail stores with consistent sales history.
  • Service-Based Businesses: HVAC, plumbing, and electrical companies, which often have stable income streams and consistent demand.

How to Qualify Based on the Business’s Books:

To leverage SBA financing effectively, ensure the business you’re considering:

  • Has consistent, documented profitability.
  • Shows stable or growing revenue trends.
  • Demonstrates solid cash flow sufficient to cover debt obligations.

Tips for Success:

  • Due Diligence: Thoroughly review the business’s financial records, customer base, and market position.
  • Professional Support: Work with a knowledgeable SBA lender and financial advisor familiar with business acquisitions.
  • Have a Solid Plan: Clearly outline how you plan to manage and grow the business post-acquisition.

Using an SBA loan to purchase a thriving business can set you up for long-term entrepreneurial success. By understanding the lending criteria and strategically selecting the right type of business, you can confidently step into business ownership and start building your financial future today!