The SBA was established in 1953 to provide support to entrepreneurs and small businesses. SBA loans are made by private lenders, like Midland, and the SBA provides a government-backed guarantee on part of the loan.

Unlike conventional term loans, an SBA Loan offers business owners the opportunity to take advantage of favorable terms as part of the SBA program, while removing some of the barriers to traditional financing options. We customize SBA loans based on the unique needs of the business owner. The funds may be used for a variety of business needs.

An SBA 7a loan will generally have a longer-term and lower interest rates — but they also have stricter requirements for documentation. Midland States Bank provides both SBA loans and business loans, with flexible terms, fixed monthly payments, and fast approval. Midland States Bank services both SBA loans and general business loans.

You can get an SBA 7a loan or an SBA 504 loan through a variety of banks, non-bank lenders, and federally insured credit unions. The loan rates and terms are agreed upon by you and the lender at time of approval, provided they do not exceed SBA maximums, and the loan will be serviced by the bank. When you get an SBA loan through Midland States Bank, you benefit from our customer service and support.

The Small Business Administration only designates a Preferred Lender Program (PLP) status to certain lenders and under very stringent guidelines. Once the lender receives the PLP status, the SBA provides the bank with delegated authority to approve the loan. For borrowers, this means faster turnaround times with a local community focus. Additionally, commitment letters can be processed quickly as it may take non-Preferred Lenders a lengthier process to vet out the request. Non-Preferred lenders must submit their application packages to the Small Business Administration for processing approval. This extra step can add several weeks to the overall process.

The U.S. Small Business Administration has designated Midland States Bank as a Preferred Lender. We have the authority to process, close and service most SBA-guaranteed loans without prior review.

The typical benefits of using the SBA loan program include:

• Lower down payment requirements than traditional business loans, as low as 10%
• Longer loan terms and corresponding lower monthly payments. Real estate term loans, up to 25 years; non-real estate loans, up to 10 years.
• No balloon notes as the loans are fully amortized.
• Loans can be projection based with more relaxed requirements than traditional business loans.

As defined by the SBA, to be eligible for loan assistance, businesses must:

• Operate for profit
• Be considered a small business, as defined by the SBA
• Be engaged in, or propose to do business in the United States
• Have reasonable invested equity
• Use alternative financial resources, including personal assets, before seeking financial assistance
• Be able to demonstrate a need for a loan
• Use the funds for a sound business purpose
• Not be delinquent on any existing debt obligations to the U.S. government

Interested applicants are encouraged to contact a member of our SBA Lending team at apply@sba.midlandsb.com to discuss a specific scenario or question.

SBA Loans are great for a startup business; franchise purchase, or acquisition; partner buyouts; owner occupied real estate investing, construction; leasehold improvements; business expansion; purchasing equipment or inventory; working capital; debt refinance or a combination of any of the above.

SBA Loans are not based on collateral and typically get approved for collateral shortfalls. However, the SBA may require liens on the borrowers primary residence, rental properties, business assets or other available collateral.

For assistance with the various SBA loan types that Midland States Bank offers, contact our SBA Lending team at apply@sba.midlandsb.com for personalized information.

SBA Loans require an unlimited personal guarantee for any individual owning 20% or more of the business applying for the loan.

If you need a smaller SBA loan, reach out to us at apply@sba.midlandsb.com and one of our SBA professionals will connect you with the resources for local SBA microlenders in your area.

There are lending requirements to qualify including credit score criteria. To discuss your specific scenario or concerns, please contact our SBA Lending team at apply@sba.midlandsb.com. As a reminder, do not include credit sensitive information via email.

Like many small business owners, your business exists as an extension of yourself. However, an SBA loan can’t be used to pay off personal debt, such as credit cards, mortgages, student loans, etc. The lender and the SBA will require certification for use of funds and may require loan proceeds to be sent directly to the receiver to ensure the SBA loan funds are used as intended.

SBA Microloans are some of the more streamlined SBA loans ranging in size from $500 to $50,000. These loans are only available through special designated intermediary lenders, not banks or other traditional SBA lenders. The most streamlined SBA loan product available through traditional lenders is the SBA Express Loan.

There’s no limit to how many times you can apply for an SBA loan. The only limitation on number of loans or applications is for special loan programs, like the Paycheck Protection Program. Additionally, while there is no limit to the number of loans or applications, it is important that you disclose all existing SBA loans and applications at the time of each new application.

The SBA credit scoring tool uses the FICO® Small Business Scoring Service to expediate credit decisions. It draws on multiple data sources and more than 100 combinations of consumer and business analytical models to help streamline the loan approval process. A member of our SBA Lending team can answer more specific credit sensitive questions based on your personal scenario.

Simply put, if the SBA isn’t repaid, taxpayers ultimately share the burden. Credit checks are traditionally a way to spot borrowers who are more likely to default. This is true for both traditional SBA Loan Programs and SBA Disaster Loans.

Traditional SBA lenders do not approve businesses or owners with tax liens or judgements.