Frequently Asked Questions

The Small Business Administration (SBA) is an independent U.S. government agency created in 1953 to aid, counsel, assist, and protect the interests of small business concerns.  Although the SBA has grown and evolved in the years since it was established, their mission remains the same: providing business owners with access to capital, developing entrepreneurial spirit, reserving contracting dollars for certain business owners, and advocating on behalf of small business owners.  The SBA does not provide direct loans to small businesses. Instead, most loans issued to small business owners through SBA programs are guaranteed by the agency and issued by approved financial institutions and other lenders such as Gulf Coast Small Business Lending.  You can learn more about the SBA by visiting the agency’s website at www.sba.gov.

Gulf Coast Small Business Lending has earned nationwide SBA Preferred Lender accreditation.  Often referred to as “PLP” (preferred lenders program), lenders that earn this status have been granted delegated authority to underwrite, process, and close SBA-guaranteed loans on behalf of the SBA.  This means that we are dedicated to serving small businesses and are recognized as specialists in SBA lending and our borrowers benefit from a much quicker overall process.  Working with Gulf Coast Small Business Lending on your SBA transaction will be (approximately) 3-4 weeks faster than if you worked with a non-PLP lender.

The SBA does not engage in any direct lending.  To apply for an SBA loan, you must work with a direct lender such as Gulf Coast Small Business Lending.  The bank provides the loan, and the SBA guarantees a portion of that loan.  Additionally, the SBA provides the guidelines that lending institutions must follow to participate in the SBA loan program(s).

From time to time, the SBA is involved in special loan programs to address financial assistance needs in the aftermath of various natural or economic disasters. These programs are completely separate from the standard business loan programs offered by Gulf Coast Small Business Lending.

Yes, we offer SBA loans nationwide through a series of loan production offices in many major markets.  Through our team of experienced Business Development Officers, we are able to provide SBA loans even in those markets where we may not have a physical office.  Please visit the Our People section of our website for a listing of business development officers and their contact information.

Either method is perfectly acceptable.  It depends solely on your preference.  We deal directly with many borrowers but also work with many referral sources as well.

Qualifying for an SBA loan is typically more flexible than other types of commercial loans.  Whether you are expanding your business, buying an existing business, seeking to refinance (or consolidate/restructure) business debt, purchasing a building for your business to occupy, or starting up a franchise, SBA loans often are an ideal option because of attractive terms.  An SBA 7(a) loan will provide a longer repayment term and lower equity requirements (down payments) than standard conventional loans.  In addition, Gulf Coast Small Business Lending’s underwriting focuses primarily on historical and projected cash flow.  We have a dedicated and experienced team of SBA professionals who will work hard to ensure that your loan process is smooth and efficient.

You might be surprised to learn that “small businesses” are not always so small!  In fact, we find that the vast majority of applicants will be eligible for an SBA guaranteed loan.  In general, to be eligible, your business must be:

• Officially registered, file tax returns as required, and operate legally;
• Physically located in, and do business in, the United States or its territories;
• Owner-operated (meaning the business owner(s) invested their own time and/or money); 
• Considered a small business based on the SBA’s size standards. 

For complete details and full eligibility criteria, please contact one of our Business Development Officers to review the specifics of your situation.  

While this list may change from time to time, a general rule of thumb is that those engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole are not eligible for SBA financing.  For an up-to-date, comprehensive listing, please consult the SBA website (www.sba.gov). 

Specific types of businesses that are ineligible include:

• Real estate investment firms, when the real property will be held for investment purposes. 
• Firms involved in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade, such as wildcatting for oil and dealing in commodities futures, when not part of the regular activities of the business.
• Dealers of rare coins and stamps.
• Firms involved in lending activities, such as banks, finance companies, factors, leasing companies, insurance companies (not agents), and any other firm whose stock in trade is money.
• Pyramid sales plans, where a participant’s primary incentive is based on the sales made by an ever-increasing number of participants. 
• Firms involved in illegal activities that are against the law in the jurisdiction where the business is located. Included in these activities are the production, servicing, or distribution of otherwise legal products that are to be used in connection with an illegal activity, such as selling drug paraphernalia or operating a motel that permits illegal prostitution.
• Gambling activities, including any business whose principal activity is gambling. While this precludes loans to racetracks, casinos, and similar enterprises, the rule does not restrict loans to otherwise eligible businesses, which obtain less than one-third of their annual gross income from either the sale of official state lottery tickets under a state license, or legal gambling activities licensed and supervised by a state authority.
• Charitable, religious, or other non-profit or eleemosynary institutions, government-owned corporations, consumer and marketing cooperatives, and churches and organizations promoting religious objectives are not eligible.

SBA loans are very versatile and can be used for a combination of many business-related purposes.  These include start-up costs, renovations/construction, business expansion, acquisition of owner-user commercial real estate, equipment purchases, working capital, furniture/fixtures, leasehold improvements, debt refinance or restructuring, partner buyouts, business acquisitions, and franchise fees.

Quite often the lines between owners/individuals and their business are blurred.  We will always consider personal credit histories as one factor in assessing the character of business owners.  Additionally, personal credit provides important insight into the personal income requirements of business operators which, in turn, helps us understand the business cash flow that is available to pay the proposed debt.  

Yes! Gulf Coast Small Business Lending thanks you for your service and to demonstrate our support we are pleased to offer veterans a special enhancement to our standard SBA loan program.  We are committed to assisting veterans by providing SBA loans to acquire, start, and/or grow your veteran-owned business. For qualified veteran-owned businesses, Gulf Coast Small Business Lending will waive the packaging fee, (up to) $2,500 for your SBA loan.

To qualify for this program as a veteran-owned business you must document that your business is at least 51% -owned and controlled by an individual(s) meeting at least one of the following criteria: Honorably discharged veteran | Active-duty military service member eligible for the military’s Transition Assistance Program (TAP) | Service-disabled veteran | Reservist and/or active National Guard member | Current spouse of any veteran, active-duty service member, Reservist, National Guard member, or the widowed spouse of a service member who died while in service or as a result of a service-connected disability

Yes! Did you know that SBA International Trade Loans (ITL) may be used to purchase a business through an asset or stock purchase? By using the SBA ITL program, the borrower receives an SBA loan that closely mirrors a standard SBA 7(a) loan.

If your business engages (or is preparing to engage) in international trade, you should consider an ITL. Note that eligibility is available if your business is either a direct or indirect (meaning the business’s customer exports the items/services it purchases from the business) exporter.

Gulf Coast Small Business Lending offers SBA 7(a) loans up to $5,000,000.  Please contact one of our Business Development Officers for a loan prequalification wherein we can determine the amount your company is eligible to borrower based upon your unique situation.

We will need to review 3 years of business and personal tax returns, a personal financial statement, a management resume, and a detailed description of how the loan proceeds will be used.  We will also need details about current, outstanding business debts, as well as a copy of any purchase contracts.  Based upon your unique situation, additional information may be required.  Please speak with a Business Development Officer for a more comprehensive overview.

“Down payments” (also known as “equity injection”) can be as little as 10% of your project costs.  Please contact one of our Business Development Officers for a loan prequalification wherein we can review the details of your loan request and determine the down payment requirement for your proposed transaction.

The term of a loan depends primarily on the purpose of the loan (often referred to as Use of Proceeds). SBA 7(a) loans are fully amortizing which means there will be no balloon payment and no need to refinance at any point during the term of the loan:

• Commercial Real Estate (purchase or refinance) – loan term of up to 25 years
• Most other non-real estate related loans such as those for business acquisition, equipment, working capital – loan term of up to 10 years.

For loans with terms of up to 10 years, there is no prepayment penalty. 
For 25-year loans, the prepayment penalty is 5% the 1st year, 3% the 2nd year and 1% the 3rd year. After the first 3 years, there is no prepayment penalty.

Yes, we are required by the SBA to take a security interest in the business assets and/or a mortgage or lien on real estate.  SBA has very specific rules that must be followed, and all lending institutions must follow the same rule: SBA requires a lender to take all available and financially worthwhile collateral, both business and personal, up to the point the loan is fully secured. There are certain exceptions and allowances. This does NOT mean all SBA loans need to be secured by collateral.

Gulf Coast Small Business Lending will consider loans with limited available collateral when the business owners have good personal credit coupled with relevant industry experience and excellent business cash flow.

As with any commercial loan, borrowers are responsible for all related expenses such as SBA guaranty fee, packaging fee, legal, title insurance, appraisal, credit reports, environmental studies, and other standard closing costs, as applicable.  Many of the costs and fees are conveniently rolled into the loan and, therefore, do not require you to pay for them out-of-pocket.  Gulf Coast Small Business Lending does not charge “points” on SBA transactions.  During your loan prequalification we will be happy to provide an estimate of the costs and fees for your contemplated transaction.

If a loan is not fully secured by collateral that could be liquidated to repay the SBA loan, SBA and Gulf Coast Small Business Lending may require life insurance in an amount equal to a portion of the loan. In addition, if a business is wholly dependent on the health of a particular individual owner, and there is no plan in place for succession if that owner should pass away, life insurance may be required on that owner.  We strongly recommend that you speak with your trusted advisors about this issue as we often find that life insurance is a good idea in these situations whether we require it or not.  

No. You may purchase the property under your personal name or a separate entity so long as certain conditions are met. We will be happy to assist you in understanding how to accomplish this. Our Business Development Officers will provide the information so that your attorney and tax professionals can counsel you as to what makes the most sense for your situation.

Yes!  Documented, legitimate debts of your business may be refinanced with an SBA loan if specific criteria are met.  Please speak with one of our Business Development Officers for detailed information.  Personal debt, in general, is not eligible for refinance with an SBA loan. In certain and rare circumstances, personal debt that is clearly demonstrated to be business related and payments are being made by the business, may be eligible for refinance. Again, you should speak with one of our Business Development Officers for a personalized assessment.

Some of the information you should have ready includes:

• Personal resume and background information for the business owners;
• Personal and business tax returns for at least 3 years and interim financial statements for the business that are no more than 90 days old;
• Personal financial statements;
• Information about your personal credit score and a detailed explanation for any derogatory items;
• Business license and entity formation documents (such as Articles of Incorporation);
• Business history with details about your borrowing need and how you will plan to use the loan proceeds.

No, you do not need to be a U.S. Citizen to apply; however, you must have legal residency status.

No, you need not be a current customer and we won’t require you to move your banking relationship to apply for (or receive) an SBA loan from Gulf Coast Small Business Lending.  We encourage you to retain and maintain your current bank relationship if that is your preference.  Of course, we would be happy to assist if you are seeking new or additional banking relationship or services.

We understand your need to receive a timely and decisive response regarding your loan request.  In fact, we pride ourselves on our quick turnaround times. In most cases, you will have a credit decision within 7-10 days of submitting a completed loan package. 

Please understand that borrowers can help speed up the overall process by being highly responsive, responding to questions as quickly as possible, and submitting all requested documentation.  Failure to do so will result in a much slower process.  We need everything that we ask for and if you don’t understand the need or the request, please talk with us.  We will be happy to explain!

Currently, we do not have an online application available.  SBA (and commercial) loans are difficult to standardize because of the wide variation in business models and information that must be considered in the underwriting process.  For now, we believe the personalized approach allows for more flexibility to customize the experience to your unique needs.

Once your loan is approved it typically closes within 45-60 days. Note that construction loans take longer due to the need for permitting and contractor bids.  

Please understand that borrowers can help speed up the overall process by being highly responsive, responding to questions as quickly as possible, and submitting all requested documentation.  Failure to do so will result in a much slower process.  We need everything that we ask for and if you don’t understand the need or the request, please talk with us.  We will be happy to explain!

We recommend that you complete our Contact Us form or reach out to one of our Business Development Officers to discuss your borrowing needs.  Our Business Development Officers are highly experienced in SBA lending and will help you navigate the process from start to finish.  They will help you assess the best options, detail the requirements, answer any questions you might have, and can also facilitate a loan prequalification if you are interested in a quick, high-level evaluation.  

We love referrals and are pleased to hear that you would like to refer a loan to us!  We consider a referral to be the highest form of compliment and we carefully nurture our referral source relationships. For this reason, we routinely work with many referral sources across the U.S. and gladly pay referral fees through our Referral Fee Program.  To get started, please visit the Our People section of our website for a listing of business development officers and their contact information.  We provide formal fee agreements to our referral sources.

Gulf Coast Small Business Lending is a division of Gulf Coast Bank & Trust Co.  You can learn more about Gulf Coast Bank & Trust Co. by visiting www.GulfBank.com. 

Please visit https://www.gulfbank.com/careers.  Our parent bank, Gulf Coast Bank & Trust Co., is growing and we are always looking for energetic employees who share our passion for serving our customers and our communities.  Gulf Coast Bank & Trust Co. is an Equal Opportunity Employer/Veterans/Disabled.

Please review these FAQs as many of the most common questions are addressed. If you have additional questions, please contact:

SBA Loan Servicing Department
Phone: (972) 685-6680
Mailing address: 1505 LBJ Freeway, Suite 350, Farmers Branch, TX 75234
Email: SBAloans@gulfbank.com

Please do not email personal or financial information as email is not a secure method of transmitting sensitive information. Instead, please contact us for a secure file upload link.

For security reasons we do not currently offer your personal SBA loan information online. Please contact our SBA Loan Servicing Department (contact information is above) and we will be happy to provide the information you need.

Statements are mailed out monthly. Please contact us to confirm your mailing address. If you prefer, we can send your statements via email. To set this up, please complete the Paperless Statement Authorization form.

The year-end interest statements are mailed out annually before January 31st. If you have not received your interest statement by mid-February, please contact us so we can re-send.

Although all collateral securing your SBA loan is required to be held for the life of the loan, please contact us for further details if you have an extenuating circumstance.

If your interest rate has changed it is because your loan carries a variable rate which is (in most circumstances) tied to the Wall Street Journal (WSJ) Prime Rate plus a spread (for example, WSJ Prime Rate + 2.75%). Therefore, if the WSJ rate increases or decreases your interest rate will change accordingly. If you have additional questions or need specific details about your interest rate, please contact us.