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The U.S. Small Business Administration (SBA) was established in 1953 to assist small business owners in obtaining financing to start, grow, or succeed with their business ownership goals. Since that time, they have delivered about 20 million loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses.
The SBA is an independent Agency of the Executive Branch of the Federal Government. It is charged with the responsibility of providing four primary areas of assistance to American Small Business. These are: Advocacy, Management, Procurement, and Financial Assistance. Financial Assistance is delivered primarily through SBA’s Investment programs, Business Loan Programs, Disaster Loan Programs, and Bonding for Contractors.
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SBA administers three separate, but equally important loan programs. SBA sets the guidelines for the loans while SBA’s partners (Lenders, Community Development Organizations, and Microlending Institutions) make the loans to small businesses. SBA backs those loans with a guaranty that will eliminate some of the risk to the lending partners. The Agency's Loan guaranty requirements and practices can change however as the Government alters its fiscal policy and priorities to meet current economic conditions. Therefore, past policy cannot always be relied upon when seeking assistance in today's market.
Federal appropriations are available to the SBA to provide guarantees on loans structured under the Agency's requirements. With a loan guaranty, the actual funds are provided by independent lenders who receive the full faith and credit backing of the Federal Government on a portion of the loan they make to small business.
The loan guaranty which SBA provides transfers the risk of borrower non-payment, up to the amount of the guaranty, from the lender to SBA. Therefore, when a business applies for an SBA Loan, they are actually applying for a commercial loan, structured according to SBA requirements, which receives an SBA guaranty. In a variation of this concept, community development organizations can get the Government's full backing on their loan to finance a portion of the overall financing needs of an applicant small business.
Associate Equity Business Sales & Acquisitions works closely with a large number of SBA lenders. We are able to refer our buyers to SBA lenders who specialize in the type of business the buyer is interested in buying, and to help him/her arrange meetings and collect required paperwork to apply for the loan. Along with the buyer, we follow the loan through the steps of the process, assisting in the coordination of information as necessary.
Receiving SBA loan approval consists of 2 parts: Buyer Approval and Business Approval. Many of the businesses we have listed for sale have already been pre-approved for an SBA loan by one or more SBA lenders. This accelerates the loan process significantly since half of the loan approval process – the business itself – has already been completed.
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