SBA Loans – Frequently Asked Questions
I’ve Heard it Takes Months to Get an SBA Loan – Is that True?
No, we often close loans in fewer than 30 days. Approvals in days, not weeks.
A Friend of Mine Got an SBA Loan, and He Said it Was a Nightmare of an Ordeal. Why Would I Want an SBA Loan?
The SBA program allows a lender to make loans they would ordinarily not be able to make under their conventional loan policy. At PlainsCapital Bank, we have the experience to deliver a quick and pleasant loan process. We are experts and do this every day, not just once in a while.
What Does a Lender Look for in an Applicant?
We look at five key areas:
- Credit – You should have good personal credit history with a score of 650 or above and no defaults on any government-guaranteed debt or present tax liens or delinquencies.
- Cash flow – One of the most important aspects in qualifying for a loan is the repayment ability of the business. We will measure historical performance and look at projected cash flows to demonstrate the ability to repay the requested loan.
- Collateral – We will want all the available assets of the business to secure the loan request. Sometimes we may request additional collateral if it is available, but in Texas, we do not take a lien on the personal homestead.
- Experience – Ideally you will have direct experience in the business line for which you are requesting a loan; however, prior entrepreneurial and management experience in related industries is also a plus.
- Equity – Whether you’re buying an existing business, starting a new one, or simply expanding an existing operation, we will want to see that you have some of your own money at risk in the business, generally between 10% and 30%.
My Partner and I Have an Existing Business, and I Would Like to Buy Her Out. Is SBA Financing Available for this Purpose?
Yes, we often finance partner buyouts as long as the borrowing entity will wind up with 100% ownership. SBA does not allow for partial buyouts.
May We Refinance Existing Debt under the SBA Program?
Yes, if there is a justifiable benefit to the small business to refinance the debt. Certain restrictions do apply; call us for more details.
Can I Get Prequalified for an SBA Loan?
Yes, we will be happy to discuss your goals and objectives and suggest financing terms that may facilitate your search for a business, real estate, or other purchases for your small business.
Why Choose PlainsCapital Bank for My SBA Loan?
We deliver what we promise. You will deal directly with an experienced lender who will be there for you even after the loan is closed. We provide a total banking relationship, not just a loan.