Commercial Loans Programs and Loans from The SBA Considered

Before retirement, I ran a franchise company, and occasionally our franchise buyers have to borrow to buy equipment and pay the franchise fee. However, every time someone told me they wanted to get a loan from the Small Business Administration, I had to think twice before selling the franchise, because he was worried that it might be time for them to get approval and funding so they could get for your computer, and finally start your business. It looks like any franchisor, I was in a mad dash to put on as many units throughout the country as possible in the shortest possible time.

Therefore, I prefer to sell a franchise to a person who could pay cash, or had their own funding already available. So the question might be done is to make loans to small companies always take so long to process? No, really, really do not take longer than most commercial loans, therefore, is often a myth, and I must confess that I also believed that once. Speaking of SBA loans, and the mystique behind them, are not as complicated as you might think.

In fact, last month I read an interesting article in the Wall Street Journal published on May 16, 2011, which was titled "Deconstructing the myths about SBA loans," by Marshall Eckbald. He said four most common myths;

1 .- The SBA provides only for difficult cases
2 .- Lendors safe side
3 .- It takes forever to get a loan from the SBA
4 .- You are buried in paperwork trying to get a loan from the SBA

Now I would like to share my experience with small business administration loans as a franchisor, rather than focusing on the Wall Street Journal article that was written for a different type of audience. On the first point of contention I would say that the author is correct, that statement is false, because I know people who were financially qualified for a loan anywhere, but when he went to his local commercial bank and the bank toward them and the Small Business Administration loans, and it made sense for your situation.

But not always make sense in all situations, and financial media worldwide, and the portfolio is different. The second point is not true either because while the government guarantees most of a loan from the SBA, which do not guarantee it. Also, if a local bank has many SBA loans go bad, get off the list. The number three as I said above usually takes no longer to get an SBA loan.

And the fourth point, I can say that an SBA loan is fairly simple, and it seems that the most requested or complicated paperwork than any other type of commercial loan from a business or an existing business that is expanding. At least that has been my observation. Now there are many reasons for not wanting to get a loan from the Small Business Administration, for example, if you're buying or selling a property, or do not want certain assets secured bound for a long period of time.

And I think for most people this is their biggest concern. And so, I hope you have all this in mind, go find and read that article in the Wall Street Journal, and think about what I said here today. If you have comments or questions, perhaps some of the concerns or a case study of its own when it comes to small business administration loans, please shoot an e-mail. Your information may help someone else for a future article.