SBA Loans
River Valley Bank has been recognized as a leader in small business lending according to the Office of Advocacy, U.S. Small Business Association's (SBA) annual report. The Bank will increase the number of SBA loans it provides as a result of the new American Recovery and Reinvestment Act, which provides significant new incentives to boost small business lending.
River Valley Bank has earned special designation by SBA to participate in the Preferred Lender Program (PLP). Preferred lenders like River Valley Bank enjoy delegated underwriting and have the ability to approve SBA loan applications in-house on behalf of the SBA. This delegated underwriting provides for extremely fast loan approvals and expedited loan closings.
SBA FAQ
Q: What SBA programs does River Valley Bank (RVB) offer?
A: The staff at River Valley Bank has the skills and expertise to offer the full range of SBA products. The SBA Express program offers attractive interest rates to our customers and the security of a 50% loan guaranty to the Bank. The SBA 504 loan program, in which RVB partners with Wisconsin Business Development, offers our customers a 20-year fixed rate for real estate purchase/construction, or a 10-year fixed rate for capital equipment purchases. The most widely-used program at RVB is the SBA 7(a) guaranty. This program can be used for a variety of loan requests under $2 million. Under the provisions of the American Recovery and Reinvestment Act of 2009, the 7(a) program now offers the Bank up to a 90% guaranty, and most of the up-front borrower fees have been waived. The benefits to our customer are a longer term, a more attractive interest rate, and lower monthly payments than conventional financing. RVB has received special designation by SBA to participate in the Preferred Lenders Program (PLP) when offering 7(a) financing to our customers.
Q: What does the SBA Preferred Lender designation mean for RVB?
A: The PLP designation gives us 24-48 hour response time from SBA. The processing time for SBA loans from non-PLP lenders can be as much as 3-4 weeks from the time SBA receives the application package in Sacramento, CA. This delegated authority allows us to underwrite, close, and service our loans on behalf of SBA. Basically, it gives us the ability to say "Yes!" to our valuable small business customers.
Q: What types of businesses are eligible for SBA financing?
A: Most for-profit, "active" small businesses would be eligible for SBA financing. Passive real estate businesses, such as apartment buildings and storage facilities are not eligible for SBA. Speculative real estate held for eventual re-sale is also ineligible. SBA programs can be used for both start-up and existing businesses. For existing businesses, the borrower must show a track record of positive cash flow, capable on-site management, and a willingness to pledge available collateral. For start-up businesses, the borrower must have a complete business plan with detailed financial projections, a proposed management structure, and a willingness to pledge available collateral.
Q: What type of projects can SBA finance?
A: SBA-guaranteed funds can be utilized for a variety of purposes including real estate purchase or construction, debt refinance, equipment purchase, inventory purchase, the purchase of an existing business, and working capital. SBA can also be used to finance franchise businesses in almost every industry. SBA financing generally requires a lower down payment (as little as 10%) than conventional financing.
Q: How do I apply for an SBA loan at River Valley Bank?
A: Please contact the Business Banking Officer at the River Valley Bank location nearest you. They will be happy to review your request and screen it for eligibility and credit-worthiness along with the Bank's internal SBA Specialist. They then will determine the best SBA program for your particular needs and start the formal application and underwriting process. This process, from the initial eligibility screen until loan closing, generally takes 4-6 weeks to complete.
