As a provider of affordable business financing, Lendistry is particularly proud to offer SBA loans. The two best features of SBA are low rates and longer terms compared to traditional term loans or lines of credit. Since receiving SBA approval in 2017, Lendistry quickly became ranked 2nd in the country among SBA Community Advantage lenders.
While we love to fund businesses with SBA loans, we find many business owners are either unfamiliar with the product or believe SBA loans require a lot of time and paperwork to obtain. Lendistry is here to tell you our SBA loan is not your grandma’s SBA loan.
Here’s everything you need to know about today’s SBA loans.
Doesn’t it take, like, forever, to get an SBA loan?
No! Lendistry has received SBA approval on completed applications within 24 hours and transferred funds to a borrower’s account within 30 days. If you are seeking capital to grow your business, SBA can deliver.
How can Lendistry deliver SBA loans quickly?
Because we love small business, we want you to succeed, and we’re really good at what we do.
Do I have to jump through rings of fire to submit an application?
No way! Typically we need the following to complete an SBA loan application:
· Completed Lendistry Application
· 3 Years Business Tax Returns*
· 3 Years Personal Tax Returns
· 3 Months Bank Statements
· Year-to-Date Financial Statement
*3 years are only required if you have been in business for 3 full tax years.
Who can qualify?
Typically, our SBA clients have a minimum FICO of 600 and have been in business for two years, although we recently funded a start-up franchise with our SBA loan.
We also like to see our SBA clients have a Debt Service Ratio (DSR) of at least 1.10, but because we know each business is unique and there is more to your company than a set of numbers, we consider each business on a case-by-case basis. To determine your DSR, simply add up all your business’ monthly debt obligations and divide them by your gross monthly income.
If you’ve ever filed for bankruptcy, we like to see at least 3 years since the bankruptcy has been discharged.
Not sure if you qualify? Remember, Lendistry considers each business on its own merits. Call or email us if you want to find out more before you apply. We’re here to help!
Do I need to put up collateral?
Many types of loans require collateral as security. Should a borrower default on an auto loan or mortgage, a lender can recoup its money from the sale of the car or home. Small business lenders also seek to reduce their risk, but business collateral is less straightforward.
The SBA has more flexible collateral requirements since a portion of the loan is guaranteed. Lenders may consider accounts receivable, inventory, cash, equipment, commercial real estate, insurance policies naming the lender as beneficiary, or a combination thereof.
What does SBA even mean?
The Small Business Administration (SBA) is a government organization launched in 1953 to help provide support to entrepreneurs and small businesses. Contrary to what many people think, the SBA doesn’t actually loan money. The SBA offers loan programs through approved lenders, like Lendistry, to increase access to capital to small businesses throughout the US.
Loans, Not Grants.
While SBA loan programs ensure comparatively low rates, they are not free. Generally, SBA program rates are based on the prime rate and an allowable spread (2.25-2.75%+ depending on the loan amount and terms). Rates for SBA loans are roughly between 6-10% depending on loan amount, terms, and current prime rate. The current prime rate is 4.75%.
Why So Low?
Approved lenders like us are incentivized to offer lower-rate SBA loans because the SBA guarantees a portion of the loan, reducing the lender’s risk. Conversely, you may find very high rates on traditional term loans or lines of credit because these loans are not guaranteed, and therefore lenders assume all risk and dictate the rates they want to charge.
Lendistry’s modern SBA loan is an affordable and fast way to grow your business. So, go ahead and make Grandma proud!