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SBA Loans

The Small Business Administration is a United States Government organization tasked with facilitating loans and credit to small businesses, which in turn provide around 50% of the jobs in the United States.  There are 5 loan types available under the SBA Banner: 1) 7(a) loans (the most popular); 2) Microloans; 3) Real Estate and Equipment loans; 4) Disaster Recovery; and 5) Export loans.

Generally speaking, SBA Loans carry a lower interest rate than third party loans or loan products, and will offer a longer term for repayment.  Rates generally sit around 2.75% to 3.75% over prime, which is set by the Federal Reserve.  Loans above $151,000 will also carry an SBA guarantee fee of 2.25%.

The lower interest rates and longer repayment terms are, generally speaking, offered because the US government guarantees repayment of ca. 90% of the loan amount to the banks that issue the loans; if the loans don’t get repaid the banks don’t shoulder the entire burden, so the calculus that enters into the risk absorption by the bank or lending institution is different than a third party product.  But, in turn, they’re also harder to get and take a little more time to issue – where you can get a cash advance or short term business loan in some cases in a matter of hours, SBA loans can take a couple of days to a week for the smaller loans, and up to 3 - 4 weeks for the larger. 


Securities Act of 1933

Rumor has it the Securities Act of 1933 was put together in a hotel after Black Tuesday (1929) and the realization that, in the middle of trying to rebuild things, the government needed rules in order to prevent another market crash. 

There are several "most important" parts to the '33 Act; all-in-all, it regulates what needs to happen in order to issue either private or public securities in the United States. 

In order to avoid compliance with the entirety of the '33 Act - which in-turn requires onerous registration requirements generally reserved for public companies - you have to qualify for an exemption.  Exemptions are varied and few, but the most common of them is Regulation D which is codified at 17 USC 230.501 et seq, with Regulation A/A+ and the newer JOBS Act Title III following in a distant 3rd (we'll call them tied). 

Now, even if you qualify for an exemption, you're really just exempting yourself from the registration of securities requirements; the remainder of the provisions remain. Of those provisions, you run into things like 10(b) which governs fraud, and 17.  

In all, if you find yourself wondering if you're going to need some help wading through the '33 act, contact one of our partners

Securities and Exchange Commission - SEC

The Securities and Exchange Commission is a complex regulatory body which formulates and passes rules which correspond to statutory law, enforces those rules, processes securities applications, keeps records of public companies, and acts as the judicial body for violations of their rules. 

Shareholder Agreement

Used exclusively in Corporations, the shareholder agreement details the rights and duties of the shareholders. 

Short Term Business Loan

When many business owners think of business loans, they think of a traditional 5-10 year term loan from their local bank.

In recent years, however, short-term business loans have become an increasingly popular tool for business owners to quickly take advantage of opportunities and handle obstacles that may come their way.

For example, sometimes inventory is only available at a discount for a limited time, or marketing opportunities can be time sensitive. Sometimes, business owners just need breathing room while waiting for clients to pay. In these cases, getting a short-term business loan is often a better option to taking a loan with multi-year repayment – If you turn your inventory in 3 months, you don’t still want to be paying for that inventory in 3 years.

And, short-term financing typically has higher approval rates than long term bank loans.

We facilitate short-term small business loans with 3 to 18 month terms for $5,000-$500,000. We can also facilitate automatic daily payments to pay down your short-term small business loans principal faster in smaller daily payments, rather than one large amount at the end of the month when other bills come due.

Short-term business loans can be helpful in building your business credit.  Short-term loans are reported just like bank loans to the business credit bureaus.

Short-term small business loans also allow you to qualify for larger loans and longer terms at a later date. If you can successfully pay off a 6-month loan, this helps you to qualify for a larger loan and a longer 12-month term should you ever need to borrow again.

Small Business Administration - SBA

The Small Business Administration ("SBA") is a government organization which purports to aid small businesses and entrepreneurs.  The organization has a budget of ca. $700MM USD, and their primary contribution to the small business community is backing loans by third parties making it easier for them to obtain capital.