USDA B&I and SBA Loans

There is a misconception among borrowers that the USDA and SBA can fund loans. While the government guarantees are a critical piece to lenders providing loans to more risky loan requests, they do not have the ability to fund loans. These guarantees work in conjunction with a financial institution. If the SBA or USDA approves your loan request you will never get the money unless a bank or credit union also approves your loan.

The government guarantee programs exist as an economic development initiative. It is an incentive the government has put in place to stimulate commercial lending in the economy today. Normally the guarantee alone is enough to stimulate lending; however, recent legislation has also removed SBA fees making the program even more attractive to business owners.

When you review your loan request with the SBA or USDA program officers, it is important for you to remember that you first need a financial institution to approve your loan. Start with the lender and then engage a representative from the SBA or USDA B&I programs. Normally your lender will already have representatives in these programs they like to work with. It is best to build your relationship with the lender and utilize the contacts they have established.

With any loan request you will want to start with the lender. They have the ability to decline or approve your loan. The buck always stops with the lender. The government guarantee programs offer many incentives that may not be accessible through all lenders. Some lenders are more or less aggressive than others. Keep us in mind when navigating these relationships. We look forward to serving your loan request.

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