Believe It or Not...SBA Loans for Retailers

Common wisdom is that banks are not lending, especially to independent retailers. "Ah, those deadbeats!"

Well, last week we did what you could do. And guess what happened? We were amazed that four banks out of four initial bank meetings took great interest in potentially loaning over one million dollars to a client of ours!

For perspective, here's a little of the background to this discovery. Our client has five stores and does about $9MM a year. (They do not own real estate.) Because they've had three years of losses, their bank of ten years has moved the account into "special credits" in order to liquidate the loan balance and/or exit our client from the bank altogether. Pretty typical of the times, we'd say.

Then recently we've become aware, as you no doubt have, that the Federal government has relaxed some of the onerous conditions around the SBA loan guarantee program, specifically "7(a)". As you can do, we had our client download the SBA's loan application form, provide all of the requested info, and then have Kinkos make nice bound copies.

Meanwhile, we found on the SBA site about seven community banks that had "PLP" status; they qualified for the SBA's Preferred Lender Program. Next, we got four of them to meet with us last Friday "for no more than 60 minutes", we promised. When they heard our request and were handed the completed SBA application, all four essentially said, "Well this is very interesting to us. We're looking at the retail sector now as a way to diversify our loan portfolio from real estate loans we currently have on the books."

"Oh, really", we exclaimed. "How sweet is that! Do other retailers know about this availability?" None of them were forthcoming with an answer. So we're taking this blogosphere route. Get the word out! The Feds aren't going to keep this liberal SBA program going forever!!

Let us know if we've helped you.