Grow Your Business

Fueling Smart Growth with SBA Financing

Group of business people in meeting
 

Businesses are poised for growth, riding on high levels of employment and a frothy economy. SunTrust Research shows that 68 percent of small business owners are confident about the economic conditions in their local markets, and an equal number are confident in their own business strength.This confidence translates into a focus on business growth as a top priority, with 29 percent of owners planning to introduce new products to promote growth and 27 percent viewing expansion into new domestic or global markets as their greatest sales growth opportunity.1  Having learned to survive with modest GDP growth rates and greater economic variability, businesses are confident in their ability to succeed, no matter which way the economy turns.

Finding growth capital

Revenue growth and productivity increases fuel the need for capital to support growth.  Capital is now flowing to small businesses. According to the U.S. Small Business Administration (SBA), SBA business loan applications remain at high levels; over 66,000 loans approved for more than $30 billion to small businesses in 2018,2 with 2019 fiscal year-to-date volumes tracking the same, if not higher.3

Conditions remain favorable for businesses to launch capital-consuming growth initiatives such as investments in technology development, real estate acquisition, mergers, partner buyouts or market expansion. While obtaining financing can be time-consuming and overwhelming, particularly for non-conventional lending needs, SBA financing can be an ideal source of flexible capital. For decades, the SBA has worked through banks to help businesses take action: to acquire, to restructure, to grow organically or to lower costs.

SBA loans are growing as a viable financing source for small businesses. SBA loans provide affordable access to capital for businesses, whether for capital-hungr startups or fee-conscious veteran business owners. Continuing improvements to SBA loans allow them to fund a broad range of needs with flexibility in eligibility and favorable terms.

Understanding SBA financing

The SBA administers loan guaranty programs and support services through financial institutions like SunTrust. To support the growth of small businesses, the SBA guarantees a portion of the loan, allowing lenders to accept greater loan risk than they would with conventional loans.

SBA loans are known for their adaptability:

  • Flexibility in fund use allows financing of new and developing companies as well as non-real estate projects
  • Lending standards are less rigid than many conventional loan types, with adjusted business size standards and loan amounts
  • Options exist for longer term financing and low-down payments
  • Collateral is treated favorably
  • Business goodwill can be designated as a financeable asset
  • Paperwork is streamlined for easier loan preparation and application submission

These characteristics translate into tangible benefits for growing businesses:

  • Increase or preserve liquidity to allow the small business to increase hiring and acquire capital assets
  • Flexibility to finance partner buyouts and acquisitions
  • Extended loan terms to keep monthly loan payment low and affordable
  • Uncomplicated terms with streamlined repayment requirements
  • Financing structure designed to allow smaller businesses to qualify

The SBA loan application process has improved over the years with fewer steps and streamlined paperwork.

Dedicated banking teams specializing in SBA loans are available to help business owners compile the required financial documents. Talk to your SunTrust Relationship Manager or SBA Specialist to discuss your business plans and how SBA financing can help you get the funds you need.

Ready to see what SBA loans can do to boost your business?

Ask your SunTrust Banker to connect you with our dedicated SBA team, or find out more here.

1 SunTrust Research, Q1 2019.

2 U.S. Small Business Association Agency Financial Report, Fiscal Year 2018.

3 Weekly Lending Report, SBA Lending Statistics for Major Programs as of 7/26/2019.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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