Small Business Loans - What You Should Know About SBA and USDA

The American Dream - You Can Have Anything You Want; Just Be Prepared to Give Everything You've Got

Owning your own business may be your American dream. If so, getting assistance for your business from the U.S. Small Business Administration (SBA) or the U.S. Department of Agriculture (USDA)may be the way to achieve your dream. Both organizations have a wealth of information on their web sites about starting, managing, and expanding your business. However, as we learned from our year-long effort to receive a $250,000 SBA guaranteed loan, there were some "hidden" costs and requirements that we did not include in our business plan. This guide describes those loan requirements and may be things to consider so that you can better plan for success. Please keep in mind that these requirements may not apply to your application, but are meant only as information to make you aware of possibilities.

SHOP FOR EXPERIENCED LENDERS

Not all financial institutions offer SBA or USDA loans. Some only offer small SBA loans and you have to find a commercial lender for larger loan applications. Regardless of your need, shop around for a lender who has years of experience working with the SBA or USDA. We wasted five months working with small local banks, whose officers and board members all rejected our applications largely because they did not give commercial loans over $20,000. Interestingly, only one bank told us that BEFORE we went through the lengthy loan process with them. We ended up using a local office of a large, national lender that basically worked exclusively with SBA applications. You can get a list of approved lenders from the SBA web site.
The other reason this is so important is because experienced lenders know how to appeal loan rejections and in our case, they were successful and we received the loan the second time around.

REMEMBER THE ECONOMIC PURPOSE OF SBA AND USDA