Some of you have known me since college (looking at you, Skip) and might remember my old Jeep; it wasn’t the best car I owned but it was by far my most fun car. I traded it in for more practical car before I moved to Boston. Or was it Rochester? Two years ago, I found and restored a near-identical Jeep (’78 CJ5 with a 3-speed, 304ci AMC motor). Uncomfortable, loud, smelly, and unsafe but it passed inspection and is almost as much fun as the old one.
One thought crosses my mind when I walk towards it in the morning: “Please start…”
Which brings me to the SBA 7(a) program and my experience at Gulf Coast Small Business Lending. SBA 7(a) loans, as well as other products supported by the agency, are the ultimate “Please Start” loans.
The 7(a) loan program is the flagship product of the US Small Business Administration (SBA) and derives its name from Section 7(a) of the Small Business Act of 1953 which authorizes the SBA to guarantee business loans to American small businesses. The Act provides loan guarantees to encourage lenders like Gulf Coast Small Business Lending to provide loans to small businesses “that might not otherwise obtain financing on reasonable terms and conditions.” Annually, tens of thousands of businesses and hundreds of thousands of their employees are supported by the program.
The SBA 7(a) program is especially useful in four situations:
- Business acquisitions without real estate – the program does not require hard assets as collateral and as such is perfect for loans involving light or no collateral which are often the cases in business acquisitions. Not all banks are interested in these loans, especially once they cross the $1 million mark, but we love them!
- Working Capital – Traditional lines of credit are common but require the assignment of assets such as inventory and accounts receivable. Many businesses, especially startups, do not possess these, and SBA allows lenders like us to provide both lump-sum disbursements for working capital and revolving lines of credit not linked to current assets. We especially like to offer these to supplement the traditional SBA 7(a) term loan to provide additional liquidity, as needed, to our borrowers.
- Startups – Every entrepreneur would tell you that what’s holding them back the most from starting a business is lack of financing. And most bankers would tell you that they don’t finance startups. We love startups and support them every day with SBA 7(a) term loans and working capital loan products.
- Franchises – another often ignored and important part of the economy is franchising. Few segments scare lenders, both conventional and SBA, as much as franchising. We, on the other hand, love franchised operations, including startups!
Thankfully, my Jeep always starts. Not easily on cold days and it occasionally needs a little help, but it starts. In much the same way, Gulf Coast Small Business Lending is prepared to help you start on your next venture, whether it’s an acquisition or a startup. Please reach out to our experienced team of SBA professionals to discuss your options. Let’s get started!