Loans for Small Businesses – Are you ready to start or purchase your own business?

Loans are available for small businesses through the Small Business Administration (SBA). These loans are available for purchasing businesses, business expansion, startups and real estate acquisitions.

In this article we will be focusing on the SBA 7a Loans as they relate to business acquisitions.

Mike Pierson, Vice President and loan officer with Community South Bank, contacted me with the news that Community South Bank has recently reentered the Florida market and they are making loans available from $150,000 to $2,500,000.

Stephen Mariani from Diamond Financial says that they are also a source for the SBA 7a loans and work with some of the countries most aggressive non-bank SBA lenders.

This is great news for buyers and sellers of businesses.

Buyers can leverage themselves into a business with as little as 20% down with the bank loaning up to 80% for up to 10 years with no prepayment penalty. The loans are capped at $2.0 million. This will open the door for the buyer to acquire a larger business than they could if they had to pay all cash or procured seller financing for the business. Most time, the buyer is required to use his or her home for additional collateral over and above the first mortgage already in place. It also extends the loan repayment time when compared with seller financing. Many SBA loans will include working capital for the buyer. We have found that many sellers are reluctant to offer seller financing.

Sellers benefit from the ability to receive more cash at closing. In some cases the SBA will require the owner to hold a small personal financing note at closing. But it does allow the owner to walk away with a larger sum. A caveat being there is more paperwork involved for the seller, but short term pain for long term gain.

All and all it is a good deal for both parties when no other financing is available to complete the transaction.

Gregory Colvin is a mergers and acquisitions specialist with Acquisitions Unlimited Inc. in Tampa Florida and has facilitated the sale of numerous businesses. Greg can be contacted at 813-920-7880. Visit www.Acquisitions-Unlimited.com

Resources:
Mike Pierson-Vice President/ Loan Officer
850-650-2330 Mobile 850-232-3337
mpierson@communitysouthlending.com
http://www.communitysouthlending.com/

Stephen Mariani-President Diamond Financial
919-782-3101
steven@easysba.com
http://diamondfs.com/sbaloans.htm

U.S. Small Business Administration
http://www.sba.gov/services/financialassistance/sbaloantopics/7a/index.html

John Cathcart-Regions Bank
813-855-0214
http://www.regions.com/small_business/fin_sba_loans.rf