How to Make Your Small Business Grow

2016 is a great year to grow your business. Action steps you can take this year include…

  • Strengthening your brand image and doing more marketing
  • Embracing new technology
  • Going social to enhance your online reputation
  • Simplify and/or speeding up your billing
  • Identifying and increasing your sales production
  • Targeting other markets
  • Opening another location
  • Bidding on larger contracts – maybe government contracts
  • Diversifying your offerings
  • Merging or acquiring another business

If you’re ready to grow, Calumet Bank is ready to help with financing to assist your growth strategy. We are an experienced small business lender and our friendly commercial loan officers are happy to work with you to take your business to the next level.

If you’ve been thinking about expanding your business or renovating, you may want to consider a Small Business Association 7(a) loan.

What is an SBA 7(a) Loan?

The 7(a) loan is the simplest and most common business loan available. It’s designed for especially for small businesses like yours. These loans may be used for a multitude of uses including

  • Improvements
  • Buying commercial real estate to expand
  • Buying another business or franchise
  • Refinancing debt
  • Inventory: buying equipment, machinery, furniture or vehicles
  • Working capital
  • Start-up costs
  • Buying out a partner

The loan can even be used for a combination of all of these needs.

What’s the difference between SBA and conventional loan?

Calumet Bank’s SBA 7(a) loans are backed by the government. The SBA itself doesn’t lend the money but it sets the guidelines and guarantees up to 85% of the amount lended up to $150,000 or up to 75% on loans for up to five million dollars. Because of the SBA’s guarantee, the terms can be a bit more flexible than a conventional loan.

And the fees are less than what you’ll find with a commercial loan.

The SBA sets the guidelines for the loan so it involves following the SBA’s standard operating procedures that are found in the SBA’s Code of Federal Regulations. 7(a) loans have longer terms so that usually means lower monthly payments – and often lower down payments.

Why choose an SBA loan?

First, nearly all businesses are eligible. Because the SBA is involved, SBA loans often have lower interest rates, a longer repayment period and generally more favorable terms than non-SBA loans. You’ll never have to worry about balloon payments. There are no covenants. And you can use one loan to cover multiple purposes.

What do I need to know to apply?

The paperwork gathering is often the hardest part. The more attention you pay to getting your documents and forms in order, the smoother your experience will be.

Here are a few tips you may find helpful:

1. Determine if you’re eligible. You must be a U.S. business operating for profit with less than 500 employees.

2. Create a plan showing how you will use the loan amount. For example, it’s a good idea to supply quotes for equipment you want to purchase. Or, if you want to buy an existing business, you’ll need a proposed bill of sale including inventory and equipment included, as well as that business’s current P&L statement and income tax returns for the previous two years.

3. Know your credit history and have documents ready to show you’re a good credit candidate.

4. Document, document, document. The SBA requires three years of personal and business tax returns, financial statements, business licenses and several forms. You can find a complete application checklist on this link to the SBA website.

How fast is the loan process?

Once you’ve completed your prep work, it’s a four-step process:

1. Your initial meeting with your loan officer where information is exchanged

2. The approval process, where your application and documents are sent to the SBA for approval. This usually takes about two to three weeks.

3. Underwriting time: Calumet orders appraisals and other documents needed

4. The closing, where loan terms are finalized and signed.

To learn more about Calumet’s SBA loans, call us at (706) 884-6000 or email customerservice@calumetbank.com.