SBA Loans
Small business owners play a vital role in our local economy so we are committed to offering business financing that is accessible and flexible. Thomaston Savings Bank is a Preferred Lender with the U.S. Small Business Administration (SBA), which enables us to offer business owners the financial support that conventional loans cannot.
SBA Loan Programs
SBA loans are backed by the federal government and provide a more flexible loan structure, more time to repay and lower down payments. There are several SBA business loan options available.
In addition to the standard programs detailed below, special programs are available to eligible businesses that are facing financial hardship from COVID-19. Click here to learn more.
SBA 504 Loan
SBA 7(a) Loan
SBA Express Loan
or Line of Credit
or Line of Credit
Description
Great for long-term needs like, buying commercial real estate, starting your business and constructing or renovating facilities. Less equity required vs. a conventional business loan.
The SBA's primary loan program offers growing businesses long-term financing for a wide range of needs, from real estate to working capital. Lines of credit not permitted.
Lower borrowing maximums make for less paperwork and a faster application turnaround. Lower down payments vs. a conventional business loan.
Maximum Loan Amount
Projects considered up to and potentially exceeding $10 million
$5 million
$500,000
Maximum Term
Up to 25 years
10 years for working capital; up to 25 years for real estate; 10 years for all other loans (i.e., fixed assets and equipment)
10 years
Maximum
SBA Guaranty
SBA Guaranty
Bank portion subject to Thomaston Savings Bank pricing. SBA 2nd lien portion determined at the time of debenture sale.
75% greater than $150,000; 85% up to $150,000
50%
SBA Guaranty
Fees
Fees
Refer to SBA for details
SBA charges a fee to guaranty the loan
SBA charges a fee to guaranty the loan
Owner Equity/Liquidity
Minimum of 10%
Minimum of 10%
Minimum of 10%
Interest Rates
Competitive fixed
Competitive variable or fixed
Competitive variable or fixed
SBA 504 Loan, SBA 7(a) Loan, SBA Express Loan or Line of Credit
Eligibility
Businesses up to $15 million in net worth and $5 million in net income are eligible. For-profit businesses that meet the SBA's size and industry guidelines*.
*Industry guidelines are stated as maximums that qualify: Any and all owners who own 20% or more of the business are required to unconditionally guarantee. However, anyone with a controlling interest or key role in the business may be required to guarantee.
*Industry guidelines are stated as maximums that qualify: Any and all owners who own 20% or more of the business are required to unconditionally guarantee. However, anyone with a controlling interest or key role in the business may be required to guarantee.
Collateral
The SBA does not require a specific level of collateral. Generally, the assets being financed are used as collateral. Personal assets may be required if the assets being financed do not adequately secure the loan. Even if you've already committed your available business and personal assets, you may still qualify for SBA financing.
How to Get Started
Thomaston Savings Bank is approved to offer SBA loan products under the SBA’s Preferred Lender Program, which means you can work through the process quickly and easily with an experienced loan officer.
Have questions about which SBA loan program is right for you or need assistance with your application? Contact a Thomaston Savings Bank loan officer.
Frequently Asked Questions
The Small Business Administration (SBA) is a federal agency dedicated to strengthening America’s small businesses through initiatives such as the SBA loan program.
Under the SBA loan program, the US Government guarantees a large percentage of the loan as added security for the bank. Because the risk to the lender is decreased, this encourages them to lend the small business money with terms more favorable to the borrower. These more favorable terms may be:
- Easier qualification
- Lower down payment
- Lower interest rate
- Longer terms (or maturity)
- And others
- Business acquisition
- Business expansion
- New construction
- Purchase of land or buildings
- Purchase inventory, equipment, machinery, furniture, fixtures, supplies, and materials
- Working capital
- Partner buyout
- Debt refinancing
- Franchise financing
Thomaston Savings Bank can help you secure financing up to $5,000,000.
The maximum allowable interest rate by law is WSJ U.S. Prime Rate + 2.75%.
- Up to 10 years for equipment, refinance, leasehold improvements, or business acquisition
- Up to 25 years for real estate
- 0% for a business expansion or working capital loan.
- 10% down payment for a business purchase.
- Cash
- Home equity line of credit
- Outside investor or business partner
- Gift from family member or friend. We can send you a sample Gift Letter upon request.
There are no set credit score requirements for the SBA loan program.
- Must be a legal US business
- Must have positive cash flow for the last two years
- If no cash flow, or no positive cash flow, loan will be considered a “projection” loan or “startup” loan.
The SBA will require that the borrower pledge available collateral to help secure the loan. However, business owners with limited collateral may still be eligible to apply for an SBA loan.
To be considered for an SBA loan, the business must be for-profit, must operate and be physically located in the U.S. or its territories, and must meet the SBA size standards. A vast majority of businesses in the United States are eligible to apply for SBA loans. To qualify, the business must have a tangible net worth of $15 million or less and have an average net income of $5 million or less. The business should also have sufficient historical cash flow to show that it can pay back the loan, have a sound business purpose, and its owners must be U.S. citizens or permanent residents who have a strong borrowing history (credit score).
A business plan is a great tool for building a lender’s confidence in you as a borrower. Our team has expertise across all industries and will assist you in completing your business plan.
While the exact paperwork depends on the type of SBA loan program you are applying for, to start the loan application process you will be asked to provide detailed business information, a loan request, a copy of your last three years’ federal tax returns (both business and personal), along with your most recent business financial statements. The goal is to get an understanding of what the business is, how you intend to use the funds, and to ensure that the business can pay back the loan. In addition, you must complete our SBA loan application forms, which include a personal financial statement.
Yes, SBA loans work very well for refinancing existing business debt. There are quite a few online and traditional lenders who provide short-term business loans that feature high-interest rates. SBA loans can help by increasing the loan term and lowering the interest rate of the existing loan, which can significantly reduce monthly payments and help improve business cash flow.
Probably the biggest misconception people have about SBA loans is that obtaining an SBA loan is a lengthy process due to the amount of documentation that is required and the amount of time needed to review an SBA loan request. If you are working with an SBA Preferred Lender, such as Thomaston Savings Bank, that has an experienced staff who know the process, you should be able to get an SBA loan in a fast and efficient manner.
Routing #: 211174259