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Lately the question of affiliation and who has to personally guaranty an SBA Loan has become more gray.  Affiliation has always been more subjective t...

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SBA Lending Benefits

August 11, 2016

 

 

 

Reasons why you should choose SBA Lending or if you aren’t new to SBA Lending we are offering you a FREE Risk Assessment

 

Reduced Exposure

The most straightforward benefit that exists is the reduced exposure due to the existence of the guaranty. The Bank incurs the risk only for the unguaranteed portion of the loan.

 

 

Preserve Capital

The preservation of capital is a key concern for many banks in today’s market.  Government guaranteed lending cannot only reduce exposure, but can significantly reduce the output of capital. There is an extremely active secondary market that is interested in purchasing the guaranteed portion of the Bank’s Standard 7(a) loans.  The sale of this portion of the loan replenishes the Bank’s capital.

 

 

Income Generation

Income is generated one of two ways with – Fee Income and/or Interest Income. The secondary market is currently paying premiums in excess of 10% on variable rate SBA/USDA guaranteed loans.

 

 

Expanded Customer Base

SBA/USDA loans enable the bank to make loans not approved under its conventional policy.  This will enable the bank to assist more small businesses with limited exposure or risk.

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