From: The Salt Lake Tribune
Scott G. Davis is president of Mountain West Small Business Finance, which has loaned more than $1 billion to Utah businesses. Despite the tighter lending climate, he says business owners can still get loans.
How has the financial downturn affected small business loans?
"There has been impact in two key areas. First, businesses that can put their expansion plans on hold are doing so because of the economy's uncertainty. We believe that once the economy starts to show sustained improvement, these owners will be looking for expansion capital and will proceed with their plans. Secondly, we have seen marginal credit-quality deals either being turned down or financing is offered but at a much higher costs to the borrower. Lenders definitely are being much more careful about projects they are willing to finance."
What types of loans are available?
"From the standpoint of Small Business Administration programs, we are open for business. SBA has plenty of money to lend. In reality, SBA doesn't lend directly - it guarantees loans from banks and loans through Certified Development Companies. SBA's credit policies have not changed and it is eager to assist banks to make credit available for business growth and job creation. For instance, working capital and debt-restructure needs are best served by the SBA's 7a Loan Program. This is a bank or credit union loan guaranteed by the SBA with a variety of terms and rates. Financing for real estate and equipment is available through the SBA's 504 Loan Program."
How difficult is it to get a loan?
"An SBA loan application is the same as a typical bank commercial loan application, with the exception of a couple of extra 'read and sign' government forms. A loan for a sound business purpose, with qualified, experienced management and reasonably good cash flow, can qualify for SBA financing. Loans must be adequately secured by available collateral and business owners should be prepared to invest 10 percent to 20 percent of the anticipated cost as a down payment."
Must businesses jump through more hoops in this downturn?
"Most of the horror stories that float around about getting an SBA loan have been exaggerated and are now urban legends. Time from submission of a complete loan application to the SBA for a written loan approval is usually not more than eight to 10 working days. Sometimes unexpected complications can extend that approval, but for the most part, if you work with a bank and Certified Development Co. that is knowledgeable and experienced in SBA lending, the process won't hurt too bad."
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I like the positive attitude... but hey, its UTAH! :)
Scott G. Davis is president of Mountain West Small Business Finance, which has loaned more than $1 billion to Utah businesses. Despite the tighter lending climate, he says business owners can still get loans.
How has the financial downturn affected small business loans?
"There has been impact in two key areas. First, businesses that can put their expansion plans on hold are doing so because of the economy's uncertainty. We believe that once the economy starts to show sustained improvement, these owners will be looking for expansion capital and will proceed with their plans. Secondly, we have seen marginal credit-quality deals either being turned down or financing is offered but at a much higher costs to the borrower. Lenders definitely are being much more careful about projects they are willing to finance."
What types of loans are available?
"From the standpoint of Small Business Administration programs, we are open for business. SBA has plenty of money to lend. In reality, SBA doesn't lend directly - it guarantees loans from banks and loans through Certified Development Companies. SBA's credit policies have not changed and it is eager to assist banks to make credit available for business growth and job creation. For instance, working capital and debt-restructure needs are best served by the SBA's 7a Loan Program. This is a bank or credit union loan guaranteed by the SBA with a variety of terms and rates. Financing for real estate and equipment is available through the SBA's 504 Loan Program."
How difficult is it to get a loan?
"An SBA loan application is the same as a typical bank commercial loan application, with the exception of a couple of extra 'read and sign' government forms. A loan for a sound business purpose, with qualified, experienced management and reasonably good cash flow, can qualify for SBA financing. Loans must be adequately secured by available collateral and business owners should be prepared to invest 10 percent to 20 percent of the anticipated cost as a down payment."
Must businesses jump through more hoops in this downturn?
"Most of the horror stories that float around about getting an SBA loan have been exaggerated and are now urban legends. Time from submission of a complete loan application to the SBA for a written loan approval is usually not more than eight to 10 working days. Sometimes unexpected complications can extend that approval, but for the most part, if you work with a bank and Certified Development Co. that is knowledgeable and experienced in SBA lending, the process won't hurt too bad."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I like the positive attitude... but hey, its UTAH! :)
1 comment:
Mountain West Small Business Finance is a wonderful company and I have really enjoyed working with them and the SBA.
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