Ask a room of business owners what an SBA loan is for and you will usually get one answer, if you get one at all. The programs are broader than most people assume, and that gap between perception and reality is why plenty of qualified borrowers never start the conversation.
Hakim Kassam, Director of SBA Lending at Midwest BankCentre, walks through what SBA financing can actually be used for.
What an SBA Loan Can Be Used For
The programs cover a wider range of business needs than the real estate purchase most people picture. Eligible uses include:
- Purchasing owner-occupied commercial real estate, for a business buying the building it operates out of
- Refinancing owner-occupied commercial real estate that the business already owns
- Business acquisition loans, for buying an existing company
- Franchise financing, whether you are starting a new franchise or purchasing one already operating
- Working capital, to fund day to day operations and growth
- Debt refinancing, to restructure existing business obligations
That range is the point. An SBA loan is not a single product aimed at one kind of transaction. It is a set of programs built to fit a number of different situations a growing business runs into.
Worth a Second Look
If you ruled out SBA financing because you assumed it did not apply to your situation, it may be worth revisiting. The better question is which program fits what you are trying to accomplish, and that is a short conversation with someone who works in these loans every day.
Hakim also covers how SBA down payments and terms work and why SBA loans are not a last resort.
For more information about SBA loans, visit us online or stop by one of our local branches. Our team will help you find the right fit.