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How To Properly Apply For An SBA Working Capital Term Loan

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Manage episode 418259246 series 2518941
Nội dung được cung cấp bởi Ryan Smith. Tất cả nội dung podcast bao gồm các tập, đồ họa và mô tả podcast đều được Ryan Smith hoặc đối tác nền tảng podcast của họ tải lên và cung cấp trực tiếp. Nếu bạn cho rằng ai đó đang sử dụng tác phẩm có bản quyền của bạn mà không có sự cho phép của bạn, bạn có thể làm theo quy trình được nêu ở đây https://vi.player.fm/legal.

Working capital has many meanings and definitions depending on the application of funds. For the purpose of this podcast, I will define working capital as capital provided to a business to fund tangible recurring business expenses or capital expenditures.

Working Capital For Growth

As an SBA Loan Broker, I often receive inquiries from SMB owners for working capital to fund the growth of their business. Their definition of working capital is the transfer of funds from the lender's bank account to their bank account without any strings attached. This is not the definition of working capital.

Let's set the record straight.

Banks provide working capital to fund specific uses such as the purchase of equipment, furniture, fixtures, tenant improvements and fixed expenses such as rent, utilities, maintenance, and employee wages.

Therefore, it is important to understand that in preparing your application to submit to SBA lenders, you will need an itemized list of what we call "Use of Proceeds." Just as it implies, the phrase "use of proceeds" simply means identifying the tangible items the funds will be used for by the borrower.

To be crystal clear. When a borrower is requesting working capital for growth, they should not expect the funds to be sent to them without providing a detailed use of proceeds.

Working Capital To Acquire a Business

When applying for an SBA loan to acquire a business, lenders will nearly always provide working capital to sustain the borrower through the transition of the business. This typically includes working capital to pay up to 90 days of fixed expenses and what I refer to as "free working capital," which means the ability to spend the capital without strings attached. This amount of free working capital is normally small compared to the larger amount used for tangible capital expenditures or recurring fixed expenses.

You Are Ready To Apply

Now that you know how to properly prepare your application, you can successfully apply for working capital to grow your existing business or successfully transition a newly acquired business.

If you liked this content, let's connect on social media:

Instagram: ⁠⁠⁠https://instagram.com/mysbapro⁠⁠⁠ Twitter: ⁠⁠⁠https://x.com/mysbapro⁠⁠⁠ LinkedIn ⁠⁠⁠https://linkedin.com/in/ryanpatryck

More ThinkSBA Resources

⁠⁠⁠⁠https://calendly.com/thinksba⁠⁠⁠⁠ - Schedule Call ⁠⁠⁠⁠https://g.page/thinksba⁠⁠⁠⁠ - Google Business Page & Reviews ⁠⁠⁠⁠https://thinksba.com/faq⁠⁠⁠⁠ - Frequently Asked Questions ⁠⁠⁠⁠https://mysbaloanpro.com⁠⁠⁠⁠⁠ - My SBA Loan Pro Podcast ⁠⁠⁠⁠https://youtube.com/@thinksba⁠⁠⁠⁠ - YouTube Channel

  continue reading

60 tập

Artwork
iconChia sẻ
 
Manage episode 418259246 series 2518941
Nội dung được cung cấp bởi Ryan Smith. Tất cả nội dung podcast bao gồm các tập, đồ họa và mô tả podcast đều được Ryan Smith hoặc đối tác nền tảng podcast của họ tải lên và cung cấp trực tiếp. Nếu bạn cho rằng ai đó đang sử dụng tác phẩm có bản quyền của bạn mà không có sự cho phép của bạn, bạn có thể làm theo quy trình được nêu ở đây https://vi.player.fm/legal.

Working capital has many meanings and definitions depending on the application of funds. For the purpose of this podcast, I will define working capital as capital provided to a business to fund tangible recurring business expenses or capital expenditures.

Working Capital For Growth

As an SBA Loan Broker, I often receive inquiries from SMB owners for working capital to fund the growth of their business. Their definition of working capital is the transfer of funds from the lender's bank account to their bank account without any strings attached. This is not the definition of working capital.

Let's set the record straight.

Banks provide working capital to fund specific uses such as the purchase of equipment, furniture, fixtures, tenant improvements and fixed expenses such as rent, utilities, maintenance, and employee wages.

Therefore, it is important to understand that in preparing your application to submit to SBA lenders, you will need an itemized list of what we call "Use of Proceeds." Just as it implies, the phrase "use of proceeds" simply means identifying the tangible items the funds will be used for by the borrower.

To be crystal clear. When a borrower is requesting working capital for growth, they should not expect the funds to be sent to them without providing a detailed use of proceeds.

Working Capital To Acquire a Business

When applying for an SBA loan to acquire a business, lenders will nearly always provide working capital to sustain the borrower through the transition of the business. This typically includes working capital to pay up to 90 days of fixed expenses and what I refer to as "free working capital," which means the ability to spend the capital without strings attached. This amount of free working capital is normally small compared to the larger amount used for tangible capital expenditures or recurring fixed expenses.

You Are Ready To Apply

Now that you know how to properly prepare your application, you can successfully apply for working capital to grow your existing business or successfully transition a newly acquired business.

If you liked this content, let's connect on social media:

Instagram: ⁠⁠⁠https://instagram.com/mysbapro⁠⁠⁠ Twitter: ⁠⁠⁠https://x.com/mysbapro⁠⁠⁠ LinkedIn ⁠⁠⁠https://linkedin.com/in/ryanpatryck

More ThinkSBA Resources

⁠⁠⁠⁠https://calendly.com/thinksba⁠⁠⁠⁠ - Schedule Call ⁠⁠⁠⁠https://g.page/thinksba⁠⁠⁠⁠ - Google Business Page & Reviews ⁠⁠⁠⁠https://thinksba.com/faq⁠⁠⁠⁠ - Frequently Asked Questions ⁠⁠⁠⁠https://mysbaloanpro.com⁠⁠⁠⁠⁠ - My SBA Loan Pro Podcast ⁠⁠⁠⁠https://youtube.com/@thinksba⁠⁠⁠⁠ - YouTube Channel

  continue reading

60 tập

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