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What is SBA
The U.S. Small Business Administration, established in 1953, provides financial, technical and management assistance to help Americans start, run, and grow their businesses. With a portfolio of business loans, loan guarantees and disaster loans worth more than $45 billion, in addition to a venture capital portfolio of $13 billion, SBA is the nation's largest single financial backer of small businesses. Last year, the SBA offered management and technical assistance to more than one million small business owners. The SBA also plays a major role in the government's disaster relief efforts by making low-interest recovery loans to both homeowners and businesses. America's 23 million small businesses employ more than 50 percent of the private workforce, generate more than half of the nation's gross domestic product, and are the principal source of new jobs in the U.S. economy.
Others Offer Banks Offer SBA Loans, Why Wilshire State Bank?
Wilshire State Bank SBA Department lives by a motto, "service beyond your expectation". By living by this motto, Wilshire State Bank was able to receive many accolades for servicing our community with SBA guaranteed loans. To mention a few, in 1996, SBA department was awarded #1 SBA lender in Los Angeles, in 1997 it was awarded "Top Lender to Asian Businesses" and was awarded #2 SBA lender in Los Angeles, in 1998 it was awarded #2 SBA lender in Los Angeles, even ranking in the Top 25 nationally. Wilshire State Bank has many offices to serve you in the Greater Los Angeles Area with eight local offices and offices in Seattle, San Jose, and Dallas.
Wilshire State Bank is also a PLP lender, which stands for Preferred Lender Program. This mean Wilshire State Bank is able to approve your loan based on its credit standards without the concurrent approval from SBA, which means you do not have to wait weeks or even months for an approval.
Who is Eligible for SBA Guaranteed Loans?
Basically, many small businesses qualify for a SBA guaranteed loan.
All types of business are generally eligible except for:
- Real Estate Investment and Other Speculative Activities
- Lending Activities
- Pyramid Sales Plans
- Illegal Activities
- Gambling Activities
- Charitable, Religious, or Certain Other Nonprofit Institutions
You must be considered a small business. Basically, you cannot exceed the following size restrictions. For a more specific industry size limitation for your particular industry contact the Wilshire State Bank SBA Department.
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Industry
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Size
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Retail and Service
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$3.5 to $13.5 million
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Construction
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$7.0 to $17.0 million
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Agriculture
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$0.5 to $3.5 million
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Wholesale
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No more than 100 employees
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Manufacturing
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500 to 1,500 employees
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The proceeds of SBA loans can be used for most business purposes. These may include the purchase of real estate to house the business operations; construction, renovation or leasehold improvements; acquisition of furniture, fixtures, machinery, and equipment; purchase of inventory; and, working capital.
Proceeds for an SBA guaranteed loan CANNOT BE USED:
- To finance floor plan needs;
- To purchase real estate where the participant has issued a forward commitment to the builder/developer, or where the real estate will be held primarily for investment purposes;
- To make payments to owners or pay delinquent withholding taxes;
- To pay existing debt unless it can be shown that the refinancing will benefit the small business and that the need to refinance is not indicative of imprudent management. (Proceeds can never be used to reduce the exposure of the participant in the loans being refinanced.)
What is an SBA Guaranteed Loan?
For those applicants that meet the SBA's credit and eligibility standards, the Agency can guaranty up to eighty (80%) percent of loans of $100,000 and less, and up to seventy-five (75%) percent of loans above $100,000 (generally up to a maximum guaranty amount of $750,000).
Interest rates are negotiated between the borrower and the lender but are subject to SBA maximums, which are pegged to the bank's prime rate.
SBA loan programs are generally intended to encourage longer term small business financing but actual loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. However, maximum loan maturities have been established: twenty-five (25) years for real estate and equipment; and, generally seven (7) years for working capital
Why Should I Do an SBA Guaranteed Loan Instead of a Commercial Loan?
- Longer terms
- Lower down payment
- No prepayment penalties
- No loan fees
How Do I Apply for an SBA Guaranteed Loan?
A simple phone call (888) WSB-LEND (972-5363) will connect you to our SBA representative, who can expedite your loan application. At Wilshire State Bank, each loan officer will assist you from start to finish to process your loan application in a timely manner.
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