Think Big, Buy Small The Fantastic Economics of SBA Loans
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Jul 29, 2024 Heather Endresen, an expert in SBA lending and owner of Viso Business Capital, shares her decades of experience. She highlights the extraordinary benefits of SBA loans for first-time business buyers, including favorable terms and flexibility compared to conventional loans. The discussion dives into personal guarantees, the importance of structuring loans wisely, and the process of navigating defaults, especially in challenging times like the COVID-19 pandemic. Ideal for anyone considering entrepreneurship through acquisition!
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SBA Loan Benefits for Banks
- The SBA loan program lowers risk for banks by guaranteeing a percentage of the loan, encouraging lending to small businesses.
- This guarantee also increases bank profitability, fostering competition among lenders.
SBA Loan Limits
- Consider SBA loans if you're acquiring a business, as they offer advantageous terms.
- Be mindful of the $5 million loan cap per personal guarantor.
Personal Guarantee Requirements
- Personal guarantees (PGs) are common for smaller business loans due to key man risk.
- SBA loans require PGs regardless of loan size, unlike conventional loans.