Small business administration loans, or SBA Loans as they are more commonly known, can be an excellent tool for small businesses considering funding. Lenders appreciate the support from the Small Business Administration, which lowers their risk by guaranteeing a portion of the loan amount. This advantage carries over to the small business owner through better payment terms and lower interest rates. An SBA loan is usually the best choice for a small business owner compared to other loan options.
Intended for Small Businesses
There are several advantages to utilizing an SBA loan for the small business owner. These types of loans are created specifically with the needs of a small business in mind to promote business growth and success.
Utilization of Funds
The funds received from an SBA loan can be used for various expenses associated with a small business. Some examples of how these funds can benefit a business include acquiring real estate or inventory, funding expansion or purchasing equipment.
Every SBA loan is secured. A portion of the loan is guaranteed to the lender by the Small Business Association Agency, reducing the lender’s risk. However, if the loan is not repaid, the bank can still seize assets.
Lenders are more likely to offer financing to small businesses through SBA loans because of the lower risk and guarantee from the Federal government. Qualification criteria may also be lower for small businesses when applying for SBA loans instead of other types of loans.
There are several different SBA loans, each designed for various business needs. Small business owners should consult with their lender to determine the best fit for their small business. A Pan American Bank & Trust Lender is always available to explain the specifics of the various types of SBA loans available for your small business.
Once you’ve decided to apply for an SBA loan, being prepared with the required information is essential. Let’s review the type of information requested when applying for an SBA loan and what to expect. Your lender will require a detailed explanation of how the funds from the loan will be utilized and how the business owner plans to repay the loan. Information that will be requested includes the following:
- Business owner’s personal identification
- Current business license
- Proof of business ownership
- Profit and loss statements
- Business financials
- Two years of business and personal tax returns
- Previous loan applications and decisions
An SBA loan can be used in various positive ways to boost a business’ potential success. An influx of funds can allow for a larger space to expand, provide payroll for additional employees to increase production, pay for additional equipment to streamline production costs or fund a new product or marketing campaign. An SBA loan may seem complicated, but don’t let this deter you from acquiring such a huge advantage for your company. Let a knowledgeable PAB&T lender guide you through the steps and decisions to selecting and applying for an SBA loan and allow us to put Bizunity™ to work for you. Through incisive advice and nimble execution, we are a trusted partner through every phase of your business’ life cycle.
April – Community Banking Month
Pan American Bank & Trust is proud to be a community banking family member. In April, Pan American Bank will celebrate the spirit by which we operate: Bizunity™. This term was coined to reflect our standing as a premier bank for business and community. We offer the personalized, relationship-based service that can only be provided by an independently owned bank that values Bizunity™. Not only does Pan American Bank strive to assist and improve the communities they serve, but they also regularly achieve awards for performance. PAB&T has been recognized as "outstanding" by the FDIC for our efforts regarding community credit needs. This prestigious designation is awarded to less than 2% of banks in the United States.
Community banks primarily concentrate on the needs of the businesses and residents of the areas where their branches are located. Decisions are made by people who live and work in the community and promote only the most positive initiatives. To better define the relevance of a community bank such as PAB&T and how they define themselves from a corporate bank, here are some distinctions:
- Community banks are operated in the community they serve.
- Locally owned, most of their clients and deposits are also local.
- Deposits are reinvested in community initiatives.
- Employees are neighbors and locals who genuinely understand the community's needs.
- Community banks comprise almost 97% of all banks.
- As the primary source of lending for small businesses and farming, their assets may range from $10 million to $10 billion.
- Banking fees are lower at community banks than larger institutions.
- The Board of Directors for a community bank are selected from local residents who have a genuine vested interest in the community.
- Community banks offer a wide variety of banking products and services and offer the advantage of personalized products tailored to suit their clients' needs.
Community banks develop authentic "Relationships" with their clients. PAB&T prizes the connections they have with every client and is a much different approach than a multi-state corporate bank. PAB&T prides itself on working with clients to achieve their most ambitious dreams, the Bizunity way. The first and most important aspect of PAB&T's approach is to develop a trusted, personalized relationship with our clients.Pan American Bank & Trust would like to utilize Community Banking Month to thank the communities that we serve for the honor of allowing us to be part of your business and organizations. We are dedicated to embarking on future initiatives and relationships to improve and enhance the communities we care for.