SBA loans are available to a wide number of businesses for training and other purposes
There is a common belief about loans guaranteed by the U.S. Small Business Administration that they’re only for small businesses like the corner coffee shop ― and that the loan criteria are very restrictive.
Not so, says Pamela Davis, senior vice president and national sales manager for SBA lending for PNC Bank.
In fact, SBA-guaranteed loans with either fixed or floating interest rates even can be used to retrain employees, and about 98 percent of U.S. businesses would qualify under the definition of small business.
To meet the SBA eligibility criteria, a business must either comply with the Standard Industrial Classification code, found on sba.gov, or alternative size standards based on tangible net worth and average net income.
One of the types of loans available is the SBA Express Program.
“It can go up to $350,000 and can be used for any type of working capital,” Davis says. “It can be reworking of your people, purchasing inventory, if you had to buy computers to help train these people ― everything like that.”
Under that program, loans are guaranteed at 50 percent by the SBA against default. Part of SBA’s flagship 7(a) loan program, the Express Program, offers an accelerated turnaround time and lower interest rates for borrowers.
Businesses turned to SBA loans for longer and more creative terms than conventional bank loans to the amount of $22 billion in 2010. Guidelines were revised in 2009 and 2010 so more businesses could obtain capital to survive and grow.
For businesses seeking larger loans, there is the SBA 7(a) Preferred Lender Program that can go up to $5 million.
“That can be used for a lot of different things,” Davis says. “You have to qualify under prudent lending criteria, but it can be used for literally anything you can think of. You can buy equipment, you can use a portion of it for working capital or an addition to the building or if you wanted to hire more employees because you wanted to send some over into Germany to do processing there.
“Any program that creates jobs in my mind is a great program.”
How to reach: PNC Bank, www.pnc.com
