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FAQ: What You Need to Know to Qualify for a Small Business Loan

As a government agency, the Small Business Administration (SBA) was established to support the United States economy through financial loan programs for small and medium-sized businesses. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law to assist small businesses impacted by the precautionary coronavirus actions.

In response to the COVID-19 pandemic, the CARES Act loans prompted economic provisions to ease the borrower's eligibility for Coronavirus SBA loans. One of the COVID-19 loans is the Paycheck Protection Program, which serves to support small and medium-sized businesses, and their employed workforce, during the coronavirus standstill. 

As an experienced SBA lender, we're ready to help find the right support loan for your business operations.  

Business Classifications 

According to the North American Industry Classification System (NAICS), hundreds of businesses with less than 500 employees, private non-profit organizations, and tax-exempt 501 (c) (19) veteran enterprises have suffered from the COVID-19 pandemic. Other forms of business operations feeling the impact are independent contractors, self-employed individuals, and tribal businesses.

Recent developments in the hospitality and food industry have created a specialized business sector where some businesses operate in multiple locations. To help this segment of small businesses, the SBA has waived some rules and eased a few restrictions for independent business entities operating at different locations.

If your business falls into one of these categories, then you qualify for relief assistance through the Paycheck Protection Program.  As the number of COVID-19 affected businesses soars, the federal, state, and local governments are urging businesses to contact local SBA lenders for help in accessing the stimulus programs and submitting applications.  

SBA Loan Qualification Tools

Linked to the nation's economic recovery is the relief stimulus package. Because many of the programs have been revised, you need to work with an approved SBA lender to take advantage of the Coronavirus SBA loans under the CARES Act. 

Lenders have access to the latest information regarding all government relief efforts. So, they are in a unique position to explain how businesses can qualify for Coronavirus SBA loans. Since the SBA guarantees the loan and the lender funds the loan, establishing a relationship with an SBA lender is crucial for getting your business through the COVID-19 pandemic. 

To start the borrowing process, you’ll need to share the following business information. This is not a complete list, but definitely covers initial credentials.  

  • Tax ID
  • Trade Names
  • Annual revenues
  • Overhead costs
  • Monthly payroll
  • Ownership status
  • Existing SBA loans

SBA Loan Process

The CARES Act financing simplifies the loan process, offering small businesses immediate relief as lenders help to determine the loan amount and identify the best financing options to keep your business functioning. Backed by the SBA, the Coronavirus SBA loan parameters include no SBA fees, no collateral, and no personal guarantees.

Worried about credit? Don't let low credit scores stop you from talking with Savoy Bank. It’s true that without a good business history it can be difficult to determine how your company manages its debt. But, the low-interest-rate loans could make a difference for your business during the nation’s short and long-term recovery. Just make sure that you don’t take on more debt than you can reasonably afford.

Finding the right SBA lender does not have to be intimidating, especially in times when so much uncertainty exists.  We understand what’s happening in the business community, and we're ready to help your business succeed— give us a call. 

 

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