SBA Lending: Do I Qualify for an SBA Loan? With Kathleen Kelly and Greg Giacopelli

Jennifer and Eric talk with Kathleen Kelly and Greg Giacopelli to get a full understanding of SBA loans and when it makes sense for business owners to apply for one. Kathleen is an SVP SBA Relationship Manager at Webster Bank and Greg is the VP of Business Banking Relationship Management at Eastern Bank. There are a number of considerations and rules to understand about SBA loans, how a bank sees a potential candidate, and which loan option might be best for you. In this episode, Kathleen and Greg do a deep dive into the different situations you need to be aware of before applying for this type of loan.

Key Points

[1:40] What is an SBA loan?

[4:25] A banker or loan officer is going to look at three years of historical tax returns. This can be challenging if two of those years were COVID years.

[5:45] What factors are banks analyzing about the business before issuing an SBA loan?

[8:45] The bank first has to make an internal decision on whether they want to issue this type of loan to you.

[9:25] There are SBA rules and there are also bank rules. Some banks will not touch particular industries just because they've been burned on them in the past.

[11:05] What's the difference between an Express, 7(a) and 504 loan?

[17:55] Really be conscious of the types of income projections you have. The bank will be double-checking and scrutinizing that.

[26:45] When is it a good time for a business owner to talk to an SBA loan officer?

[31:20] Try to send financials over as early as possible.

[32:35] What is a term sheet or a commitment letter?

[37:30] If you want to get the best out of your loan, you really want to make your bottom line as strong as possible.

[43:30] Both Kathleen and Greg end the show with their tips of the day.

Tip of the Day:

Kathleen's Tip: Do not cut corners on advisors. It makes a world of difference hiring qualified and efficient professionals.

Greg's Tip: Make sure you are thoughtful and reasonable about your projections. Don't go overboard!

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Kathleen Kelly

Website

LinkedIn

Phone: 617-416-6567

Email: katkelly@websterbank.com

Greg Giacopelli

Website

LinkedIn

Phone: 781-231-4897

Email: g.giacopelli@easternbank.com

Disclaimer:

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Quotes

"There are SBA rules and then there are bank rules. Some banks just won't touch a restaurant [for example] or they got burned on a certain type of [industry]."

"Banks differ on how they price. National SBA lenders do a loan, price them variable, and sell them on the secondary market. That's the model. The regional banks price them however they price them."

"Having constant communication with the lender is really important and having it as early on as possible."