Post a new topic
    11 Replies Latest reply on Mar 10, 2009 11:10 AM by dougblume

    SBA Loans

    party01 Newbie
      We are a small business which has been impacted significantly by this economic crisis. Are there any business out there who are getting SBA 7a loans either new loans or restructured loans? Also has any of the Business Stabilization Loan money surfaced yet. My experience with lenders is bleak. We have been in business for 25 years and are looking for a lender who understands the problem and is willing to loan via SBA Guarantee.
        • Re: SBA Loans
          NoBullFunding Scout
          If your business is struggling financially, it will be tough to qualify for an SBA loan. The SBA guaranty for 7a loans is only for 75% of the loan amount, so the lender will still have to hold 25% of the loan which means they are being very selective. The trend right now is to lend to transactions that involve commercial real estate, and to businesses with 1.25x debt coverage or better.
            • Re: SBA Loans
              party01 Newbie
              Part of the Stimulus package is a 90% guarantee to the lender. In spite of this Banks are not interested in lending
              to any companies that are struggling. If the Banks position is to lend based on a conventional healthy company profile
              what is the point of increasing the goverment guarantee. We going to the Bank because we need help! If we were healthy,
              we would not be there asking for loan restructuring. Banks take the minimal risk that the economy will improve
              and small business needs to be bailed out as well, otherwise there will be more business failures and greater unemployment. This kind of thinking by the Banks will exacerbate the economic problem even more.

              I have spoken to Senators/Congressmen and they are sympatric but offer no good quick solution to small business. We have been
              in business for 26 years and this situation is extraordinary and not the fault of small business. In fact it is the direct fault of Banks and other financial entities which have been bailed out and now are reluctant to help.

              I'm frustrated.
                • Re: SBA Loans
                  NoBullFunding Scout
                  I sympathize with your sitation, and you are certainly not alone. The SBA default rate is up to 12%...that is A LOT of businesses.

                  I do however, disagree with your statement that the current situation is the fault of banks who won't lend. There is a old credo in banking about how a banker should never lend "good money after bad", which basically means that when a business is struggling, giving them more money is not necessarily the answer. If banks were to go out an lend the bailout money to anyone who needed it, those loans would be lost along with the original money they lent.

                  Your criticism that banks not lending is hurting the economy leads me to a question: If it were YOUR money, would you lend it to a business that is weak and cannot demonstrate the ability to pay it back? Would you just hand over the money and HOPE that the economy turns around?

                  Again, I do sympathize, but I think the state that we're in has more to do with years of extending credit to too many unqualified borrowers than it does to do with banks who won't lend.
                    • Re: SBA Loans
                      party01 Newbie
                      While I do appreciate and understand why banks would not lend, this is not a conventional banking scenario that small businesses are facing. I think banks should look at least afford a small business the opportunity to present their case and take into account the historic
                      profile of their customer and at least try to help them through this period of extended lack of business. Sometimes 1 month can make the difference. Of course there is risk, I guess the banks risk management analysis best determines this. I wonder if the government felt the same way when they handed over billions in TARP money.

                      On the other hand maybe the goverment should step in immediately in the same way FEMA gets involved with catastrophes and begin qualifying small business that need 2 to 300K immediately to save the business and 30 to 40 employees from loosing their jobs/houses etc.

                      I firmly believe this is a financial catastrophe and deserves the same urgency to save small business and peoples jobs. Just look at the latest unemployment fiqures.

                      Stimulas will take too long filtering money through banks! You need to get the money into the hands of small business immediately. It may even be to late.
                • Re: SBA Loans
                  LUCKIEST Guide
                  SBA Loans, Welcome

                  Who are you?? Where are you?? How do I reach you?? Email?? Phone??

                  Go to Members page and some info. Thanks
                    • Re: SBA Loans
                      dougblume Newbie
                      Already have an Sba504 loan, need to restructure debt or sba7a express to consolidate to improve cash flow, Sba seems to be the easy part, where can i find a bank that will lend it, credit good but not perfect.
                      Please contact me with any ideas. doug@townlineautogroup.com
                    • Re: SBA Loans
                      bmt2008 Adventurer

                      Regarding the Business Stabilization Program. The loans will be only available to companies that already have bank issued business loans (Key here is bank issued) and will provide up to $35K for companies struggling to pay their bills. The SBA will pay the interest on the loan for the first year and the $35K must be repaid in full within five years.

                       


                      One of the problems with this is that the $255 million the SBA has for this program does not go to loans but goes to help banks with the administration of this program. Thus, banks are not getting new money to lend. Currently, banks are not lending because they don't have money to lend (they overextended themselves over the last few years). Without new money, this program will not work. Banks still will not lend - even if the SBA will pay the interest - banks will look at this as:

                       


                      If your business is already struggling in paying its bills, why would they give you more money you could not possibly repay?

                       


                      They don't have the money to lend and cannot/will not borrow it to lend to struggling businesses.

                       


                      If they do participate, the funding will only go to companies that don't really need the money (not struggling in paying bills).

                       


                      Just my thoughts
                      • Re: SBA Loans
                        Sohail1000 Newbie
                        Does anyone know of any banks that are doing the SBA Stabalization Loans yet?

                        Jim