Can Startup Businesses Secure Ninety Percent SBA Financing for their Ventures?

Can Startup Businesses Secure Ninety Percent SBA Financing for their Ventures?

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Hey there,

I went to my local bank and was asking about getting some startup SBA financing. They weren’t so keen on lending to a startup.

Can you walk me through the SBA financing process?

Thanks,
Steve

Securing SBA financing can be challenging for startups when dealing with traditional banks, as they often hesitate to lend to startups without collateral or commercial real estate. However, alternative options such as credit unions and non-bank SBA lenders can help overcome collateral shortfalls and find suitable loans. Factors like credit score, global cash flow, and business projections play a crucial role in the financing process.

Most SBA lenders, particularly the Preferred Lenders Program (PLP) and direct SBA lenders, operate nationally and are eager to engage in SBA deals. This enthusiasm stems from the fact that the federal government guarantees a portion of the loan. After closing the transaction, these lenders typically sell off the guaranteed portion, enabling them to earn significant profits ranging from eight to fifteen percent of the SBA guaranteed amount. Consequently, banks are motivated to pursue SBA deals due to the potential financial gains involved.

To navigate the complexities, it is advisable to find a bank specializing in SBA deals, considering the borrower's unique situation. Companies like the one mentioned in this episode act as facilitators, helping borrowers find the right fit for their circumstances. They offer assistance in understanding various financing options, including SBA 7A, 504, and other types of financing, and provide guidance throughout the loan process.

Timestamps:
(00:03) Question about the SBA financing process for a startup business
(00:35) Differences between traditional banks and direct SBA lenders
(01:08) Finding the right lender for SBA financing based on eligibility and situation
(02:20) Book a call at https://investorfinancingpodcast.com/rumble

💥 Thanks for watching 💥
#SBA #sbafinancing #startupbusiness

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