Wells Fargo, with the help of the SBA is getting startup and small business funds in to the hands of perspective and current business owners using the Small Business Association 7(a) loan program.
The SBA 7(a) loan program is a type of loan designed for certain types of businesses. Some of examples of eligible small businesses include those that export goods, businesses that have been impacted by NAFTA, those that help implement pollution control mechanisms and rural based businesses. The SBA partners with what they refer to as community advantage lenders to get the funds in to the hands of the qualified businesses in communities across America. Businesses must have less than $20 million in annual revenue and less than 500 employees in order to qualify for the loan.
Wells Fargo is one of those lenders. As America’s largest consumer bank, Wells Fargo has just became the first bank to loan more than $1 billion in SBA 7(a) funds. The SBA and Wells Fargo understand the frustration of small business owners and perspective entrepreneurs. Small businesses are supposed to do the hiring that brings the country out of tough economic times but without capital, a business can’t do that. For those who believe that no bank is lending to small businesses, look no further than Wells Fargo.
Additionally, people like award winning New York Times Report Thomas Friedman is campaigning for people to start sustainable businesses but they don’t qualify for a startup loan under current credit standards. These two difficulties have brought the small business landscape to a standstill. Wells Fargo has changed that by lending a record amount in 2011 and plans to lend even more in 2012.
Fox Business chronicles the story of Ben McClure, a perspective small business owner who wanted to purchase the business he works for from his boss. Through the SBA 7(a) program in the form of a loan from Wells Fargo, McClure secured a $369,000 loan to purchase the business, build the inventory, and even move the business to a more profitable location. He locked in an interest rate of 6.9% for 10 years which gives him flexibility to use the funds as capital requirements arise.
For entrepreneurs who are planning to form an LLC or other business startup but they need funding from a bank, the SBA has a variety of programs that can assist perspective owners in securing the funding they need. If you thought there was no hope of starting your business in this environment, think again. Now may be the time.