Frequently Asked Questions
1 Why use USA Funding to process my Government Loan?
(Why should I not go directly to the bank?)
 
2 Is USA Funding a loan broker?
What makes you different from a broker?
3 Why should I finance my commercial property through a Government Loan (why not just go to my bank for a commercial mortgage)?
4 I heard that the SBA process will take forever?
5 Do I have to be a minority to get these loans?
6 Do I have to be turned down by three banks before I can apply to the SBA?
7 What will you take for collateral?
8 Why not just lease the equipment I need through an equipment leasing company?


1 Why use USA Funding to process my Government Loan?
(Why should I not go directly to the bank?)
All lending (but specifically Government Lending) is an art and not a science! What this means is that if you can not present yourself properly to the lender, fail to keep up to date with the changes in the government lending programs, are unfamiliar with the required format of your business plan or complete your projections or any other financial data incorrectly you will cause yourself to be turned down for financing.

Last year alone, USA Funding successfully processed over $9,000,000 in loans for clients who were turned down by lenders prior to coming to USA Funding for help. These were people in the tri-state area who were credit worthy but could not navigate the difficult application processes set forth by the lending institutions.

USA Funding is run by a team of trained accountants with over 20 years experience in the Government lending industry. We will quickly ascertain your ability to be approved for government financing, provide you with a rate and term that we know we can achieve for your business (pre approval) and furnish you with references on our organization, all within a 48 hour period and at no cost to you!

Most importantly, USA Funding will handle ALL of your paperwork associated with this loan. We will not only complete all necessary forms, write your complete business plan and make all presentations to the lender but we will also work closely with your accountant and attorney in order to orchestrate a fast and profitable closing for you, our client.

In summary, you keep running your business and we will do everything associated with getting you your financing!

2 Is USA Funding a loan broker?
What makes you different from a broker?
No, USA Funding is not considered a broker because we can process your SBA loan and charge you absolutely NO POINTS! That is correct! We will pre-qualify your organization, guarantee your approval complete all of your necessary paperwork (including writing your complete business plan and reviewing all financial data prior to being submitted to the lender) and orchestrate your closing with your attorney. Upon the close of your financing, you pay USA Funding NO POINTS!

3 Why should I finance my commercial property through a Government Loan (why not just go to my bank for a commercial mortgage)?
There are two main reasons for utilizing a Government loan for the purchase of commercial property; a possible smaller down payment (less money out of your pocket) and a straight amortization (25 years) with no balloons (no one can call in your loan)!

A traditional commercial mortgage will require the potential borrower to inject 30% or more (of the purchase price) into the transaction and will finance the remaining 70% over a 20 or 25 year term, with a balloon which occurs every five years! What this "Balloon" means is that every five years, the lender has the right to review your file and possibly call your note and demand repayment of the unpaid balance. This is most common when your commercial bank is purchased (or merges) with a larger bank who no longer wants to carry commercial mortgages on their portfolio.

The SBA, FmHA and NJEDA all have straight amortized loans (with absolutely no balloons) So no one can ever call in your loan. Your financing is guaranteed for the entire term of your loan.

4 I heard that the SBA process will take forever?
Provided our clients provide us with the basic necessary items needed to process their loans within a reasonable time frame, some of our applicants can achieve a closing in as little as 25 days, and some cases (depending on complexity and appraisal time) the process can take up to 45 days.

Due to our volume of loans processed, USA Funding has the knowledge, staff and overall capabilities to complete your request much faster than the industry average.

5 Do I have to be a minority to get these loans?
The answer is NO! The U.S. Government does not discriminate against anyone based upon their race, religion or country of origin. This misconception can be traced back to when the SBA used to make "direct loans" to minorities in order to help the nation's minority business communities. This program has long been replaced with the current "Guaranteed Loan Program" (7A) which has been extremely successful in helping all small business owners achieve quality "long term" financing.

The ultimate financing decision is based upon the business cash flow, collateral and the benefits that this loan will provide for the potential borrower business. Ethnicity or sex of the borrower does not even play a role in determining eligibility under these programs.

6 Do I have to be turned down by three banks before I can apply to the SBA?
The myth that an applicant has to be turned down by a lender is absolutely not true. In fact, over 70% of our existing client base has never been turned down for financing.

The SBA is there to assist Small Business in providing capital (with longer and more reasonable terms) to corporations who are attempting to expand, purchase or refinance the mortgage on their commercial location, refinance short term debts, purchase or refinance machinery and equipment or obtain working capital for the purchase of inventory or future growth of the operation, ALL IN ONE LOAN!

You do not need to apply anywhere prior to contacting USA Funding!

7 What will you take for collateral?
As common sense would dictate, the proposed loan must be reasonably secured to assure its repayment. In other words, there should be sufficient collateral to cover the loan amount in case of a default situation.

Lack of collateral, however, is not a determining factor in denying a loan; although if an applicant does have assets the SBA may ask them to be pledged. Each situation is different and must be reviewed on a "case by case" basis.

8 Why not just lease the equipment I need through an equipment leasing company?
With an SBA loan a business can finance 100% of the equipment cost (including installation costs, should they decide to do so). Compared this to standard equipment leasing companies who will lease you equipment (for shorter periods of time which carry higher monthly payments) and will not cover any installation or set up costs.

Another option is to finance your equipment through your commercial bank. In this case, most commercial lenders traditionally require the potential borrower to inject up to 30% of the equipment cost into the transaction and will only finance the remaining 70% for a five year term (leaving the borrower with a much higher monthly payment).

USA Funding, through our lenders and the SBA, cans provide a fully amortized loan for Machinery and equipment that carries a 10 year term! In addition, they will also consider financing the set up and rigging of the new equipment. Additionally and most important, SBA loans do not traditionally carry a pre-payment penalties and have no balloons.


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