Business Valuations for SBA Loans
We at Peak Business Valuation have a commitment to help small businesses thrive! We are a business valuation company that specializes in providing business valuations for SBA 7(a) loans. Below we discuss what the SBA loan program is and why a business valuation is often needed. Then we review some of the advantages of using the SBA loan program. Reach out with any questions by scheduling a free consultation.
What is the SBA Loan Program?
The United States Small Business Administration (SBA) helps small business owners start, grow, and find success. As such the SBA loan program helps small business owners obtain financing. The SBA does not directly offer loans. Instead, they are offered through partnering lenders. These lenders may include banks, credit unions, and other financial institutions.
Why does an SBA Loan often need a Business Valuation?
The following SBA Standard Operating Procedures 50 1- 6(k) states:
“If the amount being financed (including any 7(a), 504, seller, or other financings) minus the appraised value of the real estate and/or equipment is greater than $250,000 or if there is a close relationship between the buyer and seller (for example, transactions between family members or business partners), the lender must obtain an independent business appraisal from a qualified source.”
As stated above, if the amount of financing is above $250,000 or the loan warrants additional support, the SBA lender must obtain an independent, third-party business appraisal. A certified valuation specialist provides SBA business valuations.
Here at Peak Business Valuation, business appraiser Utah, we have a team of qualified professionals. All our business valuation reports are reviewed and signed by our Managing Partner. Ryan goes above and beyond the necessary qualifications by having his CPA (Certified Public Accountant) and ABV (Accredited in Business Valuation).
How does Peak provide SBA 7(a) business valuations?
We understand the importance of small businesses in the economy. Small businesses are essential to help provide job opportunities and contribute to a successful economy. So, one of the many ways Peak Business Valuation helps small businesses thrive is by working with lenders to provide financing for SBA loans.
As you receive your SBA business valuation through Peak Business Valuation, business appraiser Utah, we assure you that you will receive the highest quality work with quick turnaround times. Peak Business Valuation delivers accurate valuation reports within 4-6 business days from the time of engagement. Our turnaround time for SBA lenders is half that of our major competitors. Engaging with Peak Business Valuation can help you close your SBA loan faster.
What are the Advantages of Using the SBA Loan Program?
While the SBA loan program is not meant for every small business out there, for those who qualify there are several advantages. Some of the advantages of the SBA 7(a) loan we mention below:
Low-Interest Rates
Currently, the average interest rate for an SBA 7(a) loan is around 6.00%. The interest rate is generally equal to the WSJ Prime Rate + a reasonable rate capped at 2.75%. Non-SBA loans typically charge a much higher interest rate.
Capital Availability
Next, when utilizing an SBA 7(a) loan, a portion of the loan is guaranteed by the SBA. This significantly reduces the amount of risk for banks and lenders. As such, lenders are willing to lend more generously to small businesses in need.
Generous Term Length
The length of terms for an SBA 7(a) loan vary. The loan can range from 10 years or up to 25 years if the loan includes the repayment of real estate. SBA 7(a) loans have flexible repayment options that help make payments affordable for small businesses.
Lower Down Payment Requirements
Next, depending on the type and amount of financing, the lender may require a down payment or other capital injection. Down payments for SBA 7(a) loans are generally much lower than other types of loans.
Access to SBA Resources Partners
Last, the SBA offers free training, mentoring, and counseling to help small business owners start-up and thrive throughout all stages of the business life cycle. SBA Resource Partners has over 950 small business development centers available to small business owners. The SBA Resources Partners also offers access to a large nationwide network of business mentors. Some other resources include Women’s Business Centers and Veterans Business Outreach Centers. Regardless of your industry, location, or experience, the SBA offers help in achieving your dreams.
Summary
Peak Business Valuation, business appraiser Utah, provides more than 30 SBA 7(a) business valuations each month to lenders across the country. As such, we are proficient and experienced in providing SBA business valuations. With less than half the turnaround time of our competitors, Peak can help you close your SBA loan faster.
If you have questions about the SBA loan program or obtaining an SBA 7(a) business valuation, please reach out! You can contact us by scheduling your free consultation below.
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