Some Small Businesses Benefiting From SBA-Backed Loans

Posted on November 12, 2009 by Biz2Credit Advisor

It’s not all bad news for small businesses. Fifty Milwaukee-area small businesses were approved for SBA-backed loans in September and October to expand facilities, move into new ones or buy equipment, according to an article in the Business Journal of Milwaukee.

The businesses applied for those loans, ranging from $200,000 to $2 million, after the passage of the federal stimulus package in March which provided for higher SBA-backed loan guarantees and reduced fees to encourage more bank lending.

The Obama administration’s plan to raise the maximum amount for SBA-backed loans from $2 million to $5 million could further energize area small businesses, Wisconsin SBA director Eric Ness told the Business Journal’s Rich Kirchen.

“There’s a lot of pent-up demand from a lot of successful small businesses who want to grow,” Ness said.

The largest loans in Wisconsin went to businesses in the metal industry, commercial printing, outdoor furniture manufacturing and food packaging, said the article.

Greg Huffman, owner of a family-owned hunting supply business, completed a $1.6 million facilities expansion thanks to the attractive SBA-backed lending terms and lagging real estate market.

“You might see ups and downs, but when you have a passionate customer base, they’re with you through thick and thin,” Huffman told the Business Journal.

This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to katie.kapler@biz2credit.com

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Generally, small business owners need commercial loans to buy a business with real estate, refinance a commercial real estate asset (like a gas station, strip mall, industrial warehouse, office building, motel, hotel, etc.) or refinance a business with real estate. However, the complexity of commercial loans makes deal structuring difficult. Here's our guide to commercial loans.:

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SBA Loan Programs broken out by benefits, eligibility, use of proceeds, loan amounts and rate structure and typical loan amortization. Compare your SBA Loan options here!:

New entrepreneurs often make the mistake of using their own money to buy equipment. Leasing is a much cheaper and easier alternative for financing equipment purchases. Any business with equipment can take advantage of this product.

If you're looking to buy a business, consult a business valuation expert to help you find appropriate business financing alternatives. Try talking to your accountant or banker or search online for business valuation guides and loans to buy a business.

Merchant Cash Advance (MCA) is an increasing popular form of small business financing in which the MCA company makes a payment to a small business in exchange for a percentage of future credit card and debit card receipts. Essentially, merchant cash advances are a discounted sale of a retailer's future credit card sales.

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