SBA Loans

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Small Business Loans

PeoplesBank has aided in small businesses’ success since 1864. With customizable solutions, PeoplesBank is ready to help address your small business’s unique financing needs. As an approved Small Business Administration (SBA) preferred lender, we make it easier than ever to get small business loans in Pennsylvania or Maryland. Learn more about how PeoplesBank can help your business reach its full potential!

An SBA Preferred Lender

The Small Business Administration is a United States government agency created in 1953 to help small businesses. Some of its essential functions include helping small businesses receive funding for growth, expansion or debt refinancing. Many companies prefer to receive loans from the SBA due to the low interest rates and flexible repayment options.

When you apply for an SBA loan without the help of a Preferred Lender, it can take 60-90 days to move from application approval to funding. A Preferred Lenders Program streamlines the process by giving lenders such as PeoplesBank the ability to make decisions about SBA loans.

The Benefits of an SBA Loan

An SBA loan is an excellent option for small businesses seeking flexible terms for their loans, as well as those who may not qualify for traditional loans. Compared to other options, an SBA loan offers more benefits, including flexible repayment options that enhance success opportunities for smaller organizations.

There are many advantages to pursuing an SBA loan as a financing option for your small business.

Relaxed Requirements

Borrowing from the SBA enables banks to extend loan terms and offer loans to businesses that may not have qualified for funding if they pursued other loan options. Businesses that take out SBA loans also have greater flexibility in the purpose of their loan. Some potential uses of an SBA loan include:

  • Purchase of assets such as machinery or equipment
  • Refinancing debt
  • Purchasing another business
  • Improving current working capital

Lower Down Payments

Many SBA loans, such as the frequently borrowed SBA 7(a) loan, require down payments as low as 10% of the size of the loan. Non-SBA loans may require 20-30%, which is often too much for small businesses to pay. The SBA loan’s lower rate enables small businesses to keep more of their money in savings instead of fixed assets.

Longer Repayment Terms

The repayment period for an SBA loan is typically longer compared to other loans. Additionally, if your SBA loan has a term of 10 years or fewer, you can choose to pay back your loan earlier if you make enough revenue to do so.

Both New and Established Businesses Can Apply

Businesses in any industry, including franchise businesses, can apply for an SBA loan. Additionally, those who wish to start a new business or expand on an existing one can apply for an SBA loan if they meet the designated requirements.

Who Qualifies for an SBA Loan?

Each lender and loan program has unique requirements that borrowers must meet to be eligible for a loan. Eligibility consists of factors such as business size and place of operation. Even businesses with bad credit can apply if they meet the eligibility requirements.

The general eligibility requirements for an SBA loan include:

  • The business operates for profit
  • The company is physically located and operates in the United States
  • Equity is invested
  • The business has exhausted other financial options

Benefits of Partnering With a Preferred Lender

If you want to receive funding to start growing your business as quickly as possible, working with an SBA Preferred Lender will help to make the process as smooth as possible. Here are a few benefits of working with an SBA Preferred Lender:

  • Preferred Lenders can approve their own loans
  • The SBA gives all questions, checks and submittals from Preferred Lenders priority consideration
  • Preferred Lenders have the ability to originate and service SBA loans

SBA Options in PA

The SBA offers many different loan options for small businesses. Each loan has specific criteria borrowers must meet to receive funding. At PeoplesBank, we offer three types of SBA loans for businesses.

7(a) Loans

Small businesses with special requirements frequently borrow a 7(a) loan. If you are making a real estate purchase, this loan would be the most beneficial. This loan also applies to short and long-term working capital, refinancing and the purchase of furniture and supplies.

A business must do the following to be eligible for a 7(a) loan:

  • Operate for profit
  • Be considered a small business within the SBA’s current definition
  • Be engaged or do business in the United States
  • Invest equity
  • Use alternate financial resources before seeking an SBA loan
  • Demonstrate a need for a loan
  • Verify the loan is for business purposes
  • Have no outstanding debt obligations to the U.S government

504 Loans

TheĀ 504 loan programĀ is a long-term loan of a fixed rate that provides financing up to $5 million for job growth and creation. This loan program is available through Certified Development Companies (CDCs), which operate as SBA-certified and -regulated community-based partners. To be eligible for this type of loan, a business must:

  • Operate for profit in the United States
  • Have a net worth of less than $15 million
  • Have an average net income of less than $5 million after federal taxes for two years before applying

SBA Express

SBA Express loans are a part of the SBA’s 7(a) loan program. An SBA Express loan has competitive pricing and flexible terms for businesses that need less than $1 million in funding. To qualify for this loan, a business must:

  • Operate in the United States for two years or more
  • Fit the definition of a small business by the SBA
  • Demonstrate a need for the loan
  • Prove the owner has pursued other financing options
  • Prove the use of the funds for business purposes
  • Have no outstanding debts to the government

Questions? Let’s Chat.

Tammy Clark-McFadden
VP, SBA Department Manager
717-724-8847

Email Tammy

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