Franchise Business Radio is a platform to bring together franchise professionals to connect, educate and collaborate to serve the franchise community and those considering franchise ownership.
Knowledge and Insight on SBA Loans
In a recent episode, Thomas Rockwood, a nationwide commercial SBA and USDA lender with Atlantic Capital Bank, provided education and insight on lending to businesses seeking capital to start, grow, and expand.
Here are some brief excerpts from the interview between Franchise Business Radio host Pamela Currie and guest Thomas Rockwood.
Currie: First things first, who is involved with SBA lending?
Rockwood: The SBA is the Small Business Administration. It’s a division of the federal government, and mostly they’ve put together loan programs, which have been in place for 50-plus years to incentivize banks to say, “Yes” on lending to companies.
Currie: It takes a team to get a business going and funding is needed. You’ve got the borrower (who needs the money), you have the lender (bank), and then you have the government programs to encourage banks to provide loans. How does that work for you as the lender of that loan?
Rockwood: I would say it’s about sharing risk. So, from the bank’s perspective, it’s about assessing risk, what’s the likelihood of the loan getting re-paid. To the degree that there’s a way to reduce the risk, is where the SBA guarantee comes in and that’s where the bank and the SBA (or the government) have gotten into a relationship and say, “We’ll share the risk”. So, there are two types of bank lenders: delegated banks (often called preferred lenders), and non-delegated banks that initiate the process and interact directly with the government agency to get the final approval. The partnership includes the borrower, a bank, and sometimes it’s involving the SBA, and sometimes the bank has delegated authority to make that decision quicker for the borrower.
Listen to the full interview and learn about SBA loan requirements, processes and more at FranchiseBusinessRadio.com.
Pamela Currie CFC is the host of Franchise Business Radio and has 20+ years in franchising. Her experience encompasses being a franchisee, franchisor performance and educator, franchisor system developer, trainer/mentor, and college advisory board member. She is affiliated with FranServe and Franchise City, and specializes in guiding individuals in finding a franchise. Contact her at Pam@FranchiseIntellect.com.