Why work with SmartBiz?
Lenders can have slightly different guidelines when it comes to use of funds from an SBA loan. Because SmartBiz works with multiple banks, we match you with the lender most likely aligned with the use of SBA loan proceeds you are seeking. Don't waste time going from bank to bank to find the right fit—we help you streamline this process. An SBA loan from a bank in the SmartBiz network is a smart solution to help you reach your unique business goals.
Use of Funds
Now the fun part! How can you use SBA loan proceeds to save money and grow your small business? There are lots of ways.
Working capital keeps businesses aﬂoat and humming along; it's the common measure of your company's liquidity, eﬃciency, and overall health. Calculating working capital is pretty simple: deduct current liabilities from current assets. If your current assets do not exceed your current liabilities, you run the risk of being unable to pay your short-term creditors on time. This can lead to late fees, delayed delivery of important goods and more business crushing problems.
Business owners should make sure to have enough working capital in the bank to meet ﬁnancial obligations and cover day-to-day expenses. A low-interest, long-term SBA loan can provide a steady cushion of working capital to keep your company running and growing.
In addition to using funds from a SmartBiz loan to run day-to-day operations, working capital can be used to buy additional inventory. For example, SmartBiz customer Bryan Tracey owns a skateboard manufacturing business in San Diego, CA. Stickers and skateboards go hand-in-hand and Tracey used to only be able to buy small amounts of stickers. With working capital from an SBA loan from a bank in the SmartBiz network, he was able to buy in bulk this year, saving a signiﬁcant amount of money. He wouldn't have been able to take advantage of those savings without working capital.
Take a look at your cash ﬂow and business plan. Could your small business use an infusion of working capital? Find out in about 5 minutes if you're pre-qualiﬁed for the best working capital loan—a low-interest, long-term SmartBiz SBA loan.
You can save up to thousands of dollars per month by reﬁnancing expensive debt. That's money that can go back into investing in your business instead of making high interest loan payments. A new loan, like a low rate, long term SBA loan, can make a big difference to your company. Here's how a debt consolidation loan can be a great savings solution.
Lower Rates: Paying off high interest money means you're lowering the cost of your capital. Your bank account and cash ﬂow will thank you.
Longer Terms: If two loans are similar in all respects though one has a shorter term than the other, the shorter term loan will always have a higher monthly payment versus the longer term loan. Because of this, short-term loans can hurt cash flow, and very short term loans can even spell disaster for a small business owner by trapping them in a cycle of borrowing. SBA loans from banks in the SmartBiz network have long 10 - 25 year terms resulting in lower monthly payments.
SmartBiz customer Milton Martinez, owner of Triple D Towing, was struggling to make payments on two expensive daily payment loans. He needed to create additional income instead of paying outlandish interest rates. A low-cost SBA loan was the solution. “I'm saving $15,000 - $18,000 dollars. That's money I can put back into growing my business or into savings.”
Commercial Real Estate (CRE)
If you're an established and proﬁtable business looking for the lowest funding costs and the longest repayment terms for buying or refinancing a property, an SBA 7(a) loan from $500,000 to $5 million from banks in the SmartBiz network is your best bet. With 25-year terms and interest rates between 6.25% to 7.50%1 and a minimal down payment rent replacement option, these loans can be used by a small business to reﬁnance an existing commercial real estate mortgage, buy the property the business currently operates from, or purchase other owner-occupied commercial space.
SmartBiz customer Pro-Glo Auto Finish and Glass Inc. is a family owned and operated auto body repair shop. The small business needed to reﬁnance a high interest rate commercial real estate loan with a large balloon payment coming due. The SmartBiz team helped the business take the maturing 5-year loan and turn it into an affordable 25-year fully amortizing SBA loan from a bank in the SmartBiz network. Along with the reﬁnance of the property, the loan proceeds were used to reﬁnance existing small business debt. This helped cash ﬂow and put the business in a much stronger ﬁnancial position.
To qualify for a commercial real estate SBA loan from a bank in the SmartBiz network, you need a minimum personal credit score of 675, at least three years in business and $350,000 or more in annual revenue. In addition, a minimum of 51% of the property you purchase must be occupied by and used by your business. You'll also be expected to put at least 10% down. The property you purchase or refinance will be the collateral for the loan. The SBA 7(a) loans available from banks in the SmartBiz network are typically less difficult to apply for, than loans going directly to a traditional bank, and funds can be distributed in as fast as 30 days after your commercial real estate loan application is complete.
Is business good but your stress level is high? Perhaps you're multi-tasking like a pro but you just can't get it all done. Would an extra employee or two help your business - and yourself? An SBA loan can come to the rescue! If it's time to bring in fresh talent, proceeds from these loans can help cover recruitment, salary, beneﬁts and other costs associated with ﬁnding and onboarding employees.
Take a look at your business plan to discover if funds can help ﬁnance one or more new hires. FitSmallBusiness co-owner Marc Prosser needed to hire additional staff in order to meet his growth goals. He's using proceeds from the SBA loan from banks in the SmartBiz network for $350,000 to add 20 staff members. “We're hiring great people with real hands-on experience,” he says.
Every company needs equipment to run smoothly, effectively and proﬁtably. Whether you are manufacturing products, guiding clients, or creating information, there is always equipment to buy. From computers to copiers, coffee machines to vans or cars, the sudden need to purchase new equipment can come up at any time. You might need to upgrade an older model or buy new equipment to streamline your business and speed up production. Getting an SBA loan is a low-cost way to ﬁnance major purchases that are beyond the scope of a credit card or other type of expensive funding.
SmartBiz customer Terry Trumbull was able to use proceeds from his loan to ﬁnance a new refrigerated truck. With low rates and long terms, he's saving money and is able to expand his business.
Marketing may be a great use for loan proceeds. Marketing is a must for businesses of all sizes helping to build your brand, attract customers, and increase sales. However, marketing is often the ﬁrst expense cut from budgets when cash ﬂow is tight. An established small business can spend up to 30 percent on marketing initiatives. So what should you do if your marketing budget has shrunk or is nonexistent? Consider ﬁnancing marketing with an SBA loan offered by a bank in the SmartBiz network, just like you would ﬁnance new equipment or inventory. With low rates and long terms, these loans can open up a world of marketing possibilities. Do you need direct mail collateral? Social media advertising or a new website? Low-cost funds with long terms are the way to go so you don't stress your cash ﬂow. The Small Business Administration writes that marketing is the key to future sales and cautions business owners not to ignore it. Explore an SBA loan to fuel your marketing efforts.
Small business expansion goes beyond increasing proﬁts. If your goal is to scale while increasing your bottom line, a low-cost SBA loan from a bank in the SmartBiz network is a great solution.
There are many ways your small businesses can expand. Funds from these loans can help you conduct detailed research to identify your main competitors. By diving into their target audience and product oﬀerings, you'll be able to eliminate segments of the larger market and carve out a corner you can concentrate on for expansion. Other business expansion activities include increasing your product line. SmartBiz customer Asha Waterstreet owns Tasteful Additions, a brick and mortar store specializing in gourmet oils, vinegars and salts. She used loan proceeds to add luxury beauty products and high-end tableware to her lineup. This helped her successfully expand and keep proﬁts steady all year.
More small business expansion activities can be kicked oﬀ with an SBA loan from banks in the SmartBiz network. If you require a bigger location, different pricing or new and improved marketing techniques, look into these low-cost loans.
Inventory and Operational Expense
An SBA Loan is great way to increase your inventory to meet busy times. If you don't have products on hand, you can't make that sale. What about new products? What about expanding your product line? Proceeds from a low-cost SmartBiz SBA loan can help you meet that goal as well. SmartBiz customer Bryan Tracey, owner of the skateboard company SkateXS, knew he needed deeper pockets to purchase additional inventory. During the holidays, SkateXS can get over 10x over their usual orders in a single day. One year, his inventory shortages were so severe that he actually had to turn off Amazon sales because he couldn't keep up with product demand. Bryan worked with SmartBiz Loans to help him secure an SBA loan from a bank in the SmartBiz network. He's using the proceeds to prep for his busiest season by buying more inventory. Because he's buying large amounts, his costs are much lower than in previous years. What could your small business do with more inventory this year?
2+ years in business
Business owners must be U.S. citizens or legal permanent residents
Business owners must have personal credit scores above 650
Cash flow to support loan payments
Bankruptcies or foreclosures in the last 3 years
Prior default on government backed loans
Outstanding tax liens
Loan proceeds cannot be used for unpaid taxes
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1. We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.