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The Climate is Good for Small Business Borrowing

SBA Programs and cooperation among SBA lenders increase chances of loan approval

To a start-up company seeking working capital or a small business looking to expand its facilities, to purchase new equipment, or to buy added inventory, a Small Business Administration (SBA) Loan may be just the ticket for success. By working with a lender that offers SBA Loan Programs, the entrepreneur can gain access to business capital that may not be available through conventional borrowing.

The Small Business Administration states that the two reasons business fail are poor management and lack of capital. Lack of working capital may result in insufficient inventory to meet customer demand; the inability to take advantage of key buys on seasonal merchandise, or not enabling a business to expand its facilities or to add needed equipment. As a result, the business is at a competitive disadvantage.

Most small business owners may be familiar with the concept of SBA Loans, but they may not be up to date with the latest changes in policies or trends. Now is a good time for small businesses to seek SBA Loans as the Small Business Administration is working with SBA Lenders to encourage more loan activity. At the same time, some of the paperwork of the past has been eliminated and lending limits have been increased. Loans can range from a few thousand dollars to millions. The SBA Express Loan, started in 1999, has given the lending bank more autonomy on credit decisions. In some cases, loan amounts may be smaller, but the attraction to young businesses has been dramatic. The precise objective of SBA was targeting: getting more new businesses into the program.

The Bay Area Association of Government Guaranteed Lenders (BAAGGL) is a non-profit corporation dedicated to advancing the development and growth of the SBA Loan Programs. The original mission of BAAGGL was to assist private lenders in understanding and implementing SBA Loan Programs. BAAGGL has also fostered a spirit of cooperation among the lending community and the SBA. Since 1989, its core mission has steadfastly focused on lender training. BAAGGL has over 150 members from all locales in Northern California. According to BAAGGL, each year SBA Lenders make approximately 1,500 loans worth more than $500 million to Bay Area Businesses.

With this opportune situation for small businesses, how should they seek a SBA Lender? If your bank is a SBA approved lender you may want to start there, but be mindful that lending organizations have specialty areas of lending. So if you do not get an “Approved” don’t give up.

“Bay Area lenders and our local SBA districts have a unique working relationship, ” states Francine Boards, Vice President of the SBA Department at The Mechanics Bank. “In fact, we partner closely with our local SBA district office on economic initiatives that helps small businesses obtain access to capital. The ultimate goal is to help that small business succeed in their business environment.” As a seasoned, SBA Lender, Ms. Boards treats each small business as a case study. “We devote a great deal of time to our small business customers and provide the technical assistance they need. We view each situation as an opportunity to either extend our relationship with them or to start a long-term relationship. Generating small business loans can be very rewarding as you are helping people realize their dreams by providing financing through the SBA loan program. This in turns provides a climate for small businesses to grow into larger successful companies.”

For More information: www.sba.gov, www.baaggl.org, www.mechbank.com

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