The SBA stands for the Small Business Administration. This national government program provides businesses that meet the Small Business Administration’s criteria with loans. There are several different SBA loan programs, all of which have specific circumstances, as established by the government’s SBA division.
The SBA Bridge Loan Program is solely available to help assist business owners that may have trouble, running into unexpected obstacles when using the SBA approval process. Just because the bank approves the SBA loan request and the business owner has received a SBA loan guarantee, does not mean anything if there are any outstanding prerequisites that are not met. For example, one requirement is that all past due taxes are paid so any tax liens are released.
The government, to secure the payment of property taxes, imposes tax liens. They may impose liens on real or personal property when there is a failure to pay income taxes or other necessary taxes. This may also arise in connection with federal taxes, income taxes, gift taxes or even estate taxes.
The SBA bridge loan can help small business owners have access to funds to help address and resolve any outstanding tax issues, helping reduce any payoff amounts when the SBA loan is approved. These bridge loans are also excellent for day-to-day financing and business management. Provided in a lump sum, the money can help provide much needed cash flows, while applying for the SBA loan, which may take several months to receive approval.
The Small Business Aministration loan also has several other benefits. It reviews all qualifications for the business, not simply a credit score. They look at the cash flow and the potential cash flow, not simply current numbers. The financing program is based on the gross sale and business cash flow. The repayment schedule is simple and does not require fixed assets as collateral. They generally have higher approval rates than banks and decisions are made within three to five business days. With minimal paperwork, business owners can immediately begin receiving financial benefits.
Most SBA bridge loans have the following advantages:
- Offer loans between $5,000 to $250,000
- No upfront fees
- No monthly payments
- No personal guarantees or collateral
- No restrictions on funding usage
- Payments required only when companies make sales
Customers benefit because these loans offer higher approval rates than traditional banks, feature minimal paperwork, highlight faster funding and offer easy renewals.