This newsletter will often circle back to a central theme. You don’t have to have collateral to qualify for an SBA loan. I need to beat that into my audience’s heads time and time again! To get the point across; once I worked for a bank and after nearly 2 ½ years of financing collateral short deals the Chairman asked me, “And the SBA will be OK without any collateral?”
It’s times like these where you can only respond by simply saying, “You mean the SBA has to approve our loans?”
I consider the program the great equalizer, because you don’t need to have a large stock portfolio or lots of equity in realestate to get a loan. You don’t need years in business or years of favorable performance. In many SBA shops it’s just one good year — albeit, it’s got to be the most recent.
SBA lending offers the borrower a way to finance what a conventional lender would otherwise consider impossible — unless the customer has assets outside the business — again, stock, real estate or my favorite … a baseball card collection.
The days of manufacturing have long passed us by. We are a service-oriented economy. And these companies grow on working capital and sell on good will. Lots of intangibles.
Lending with an SBA guarantee can offer solutions that simply go beyond real estate — you can’t start a business when a bank will only lend you money for real estate. What about salaries? What about advertising?
So before you laugh that borrower out of your office. Take a moment to pick up the phone and call me and I promise to turn that grin into a shocked expression of WTF when I say, “yeah I can do that deal.”
Oh yeah, you know who I’m talking about! You’re on my mailing list!
Namaste…..partners.
Not All SBA Lenders Are Created Equal.
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