Yesterday I attended a panel discussion put on by the Clothier-Head CPA firm. The subject was SBA guaranteed loans and included loan officers, the SBA lending manager and a tax accountant.
What I got out of the session was three main points:
For many deals, business acquisitions and real estate, there is a good chance that without the SBA there won’t be a loan.
That while it is government money, the fees paid by the borrower cover the costs the SBA incurs.
There are some tax advantages to investing in equipment this year (a reason to borrow) and these loans tend to create jobs.
I know for a fact that with acquisitions it’s a rare deal that won’t involved bank financing without the SBA. There are some qualifications buyer and seller must meet or agree to specific payback terms but those terms aren’t too bad. And, they allow deals to happen with the seller getting more cash than without a bank and the buyer getting the business they feel they can grow.