fun·ding /‘fəndiNG/noun
1. The action or practice of providing money for a particular purpose 2. Shay Mora on SBA loans
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ven a low-cost franchise can require $100,000 to get up and running, and some need considerably more. Entrepreneurs often must line up financing for their start-ups or other major expenses. Many of them seek Small Business Administration loans but find the process challenging. One source for assistance is FranFund, which has used its portfolio of top SBA lenders and SBA Express/7(a) Small Loan programs to help hundreds of new and existing franchisees receive funding. These loans are ideal for service-based businesses requiring $150,000 or less for a start-up, expansion, or working capital loan; some lenders go as high as $350,000. Although the fast-tracking of SBA Express attracts many borrowers, the specifics of these loans often create confusion over eligibility, requirements, and terms. Following are answers to common questions about SBA Express/7(a) Small Loans.
to secure a larger SBA guaranty (up to 85% vs. 50% Express) as additional security because these typically don’t require personal collateral. Also, with the SBA guaranteeing 85% up to a loan amount of $150,000 and only 75% for loans from $150,000 to $350,000, many banks cap their programs at $150,000. WHERE CAN I GET AN SBA EXPRESS/7(A) SMALL LOAN? Banks can be selective about the industries they work with, number of startups they lend to, and kinds of business costs they cover. Because it is challenging for borrowers to find a bank that is a good fit for their specific franchise, it’s wise to work with a lending consultant such as FranFund, which specializes in SBA loans and can match franchisees with the right lender.
CAN I RECEIVE AN SBA EXPRESS/7(A) SMALL LOAN IF I HAVE BAD CREDIT? Banks look at business owners’ personal credit ARE ALL SBA EXPRESS score (FICO) and small business credit score LOANS THE SAME? (SBSS). If your personal credit score is below Yes. All SBA Express loans follow the same SBA 680, you’ll need a good explanation and good rulebook regardless of lender. Many lenders ad- liquidity/income. The SBSS scores a small vertise an SBA Express program, but most actu- business by its likelihood of making payments ally submit those loans as SBA 7(a) Small Loans on time. You’ll need an SBSS score of 165+.
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