Best Financing Options for Small BusinessesOur focus is on offering financial help for small business borrowers.  Therefore, allow us to share some tips and resources available as you look to grow your business:


Plan Ahead

As you consider your goals, remember that it is never too early to start planning for future needs.  Whether those needs are 2 months out, or 2 years down the road, preparing for the “whens” and “what-ifs” will reduce some of the stress when those actual moments do arise.

  • Do you want to buy, build or renovate a space for your business?
  • Do you have a balloon payment coming due on your commercial mortgage?
  • Do you need to buy new machinery or equipment?
  • Would you like to refinance your commercial debt into a low, long-term fixed rate?
  • Are you considering a business acquisition that would involve the acquisition of real estate?
  • Does an owner in your business want to sell his/her percentage of real estate to the other owner(s)?
  • Would you like to expand to multiple locations?

Remember, it also never hurts to dust off that business plan and re-visit it every couple of years.  Compare your current financials to past projections and map out your goals.


Financial Help for Small Business Owners

Many local, state and federal government assistance programs exist for small businesses…consider them your acronym superheroes…SBA, SBDC, SCORE and BAM (Bankers and Mentors)…many of which offer their services free of charge.  Share your plans, concerns, “whens” and “what-ifs” with these professionals as they’re standing by ready to guide you. They want to see you achieve your goals too!

  • SBA – best known for the loan guarantee programs it provides to small businesses in partnership with banks, lending institutions and CDC’s, such as Growth Corp.  The two most common SBA loans are the 504 and 7(a).
  • SBDC – provide management assistance to small business owners in the form of counseling, training seminars, assistance with SBA loans and technical assistance.  SBDC’s aren’t just for start-up’s.  Existing businesses that are expanding or reaching into new markets could also greatly benefit from SBDC assistance.
  • SCORE – a network of retired business executives, leaders and volunteers who provide free and confidential counseling, mentoring and advice to small business owners nationwide.
  • BAM – your local Bankers, Accountants and Mentors can help with everything from strategizing how to best grow your business to offering financial advice.  In addition, these valuable advisers can also help you network by introducing you to other industry professionals or service-providers.


Many local, state and federal government assistance programs exist for small businesses…many of which offer their services free of charge. Consider them your acronym superheroes.


When the Time Comes to Expand, Utilize the Best Financing Option for Small Businesses

While once a lesser known financing option, a.k.a. “the best kept secret in commercial financing”, entrepreneurs are discovering that SBA 504 loans were designed to level the playing field for small business owners looking to expand.

If you are a small business owner, you are probably familiar with the U.S. Small Business Administration (SBA), but, unfortunately, many are unfamiliar with one of its best financing options.  The SBA established a program over 30 years ago called the 504 Loan Program.  This program works in conjunction with your bank to allow business owners to receive up to 90% financing for the acquisition, construction, improvement or expansion of commercial property or for acquiring heavy machinery or equipment.  The program essentially consists of three key elements:  50% of the project’s total cost is provided by a lending institution, usually a bank; 40% is provided through the SBA’s 504 Loan Program; and 10% equity is provided by the borrower.  (Start-up businesses and single-purpose facilities require a slightly higher equity contribution.)

By requiring a smaller down payment, the 504 can help the business conserve their operating capital, while the structure of the program makes it attractive to financial institutions.  Plus, the fixed rate and long loan term insulates borrowers from rising interest rates and future balloon payments or call provisions.  The portion of the loan funded by the SBA is some of the least expensive financing available to businesses.  In addition, the 504 rate is locked in for up to 25 years.


SBA Has Expanded Loan Availability

There is plenty of money available for lending.  In fact, the SBA has recently displayed significant effort in making the 504 Loan Program available to even more businesses.  With higher loan limits, expanded eligibility standards, and a new debt refinance option, more businesses are now able to utilize the 504 than ever before.  Plus, the 504 offers 90% loan-to-cost financing for most commercial real estate projects (inclusive of land, existing building, ground-up construction, furniture, fixtures, equipment, soft costs and closing costs), SBA 504 loans are a very powerful tool, yet they remain under-utilized because many small business owners just aren’t aware this financing option exists.  Last year, 504 loans helped fuel just shy of $5 billion in new capital investments for 5,800 businesses throughout the U.S.

Working with a variety of businesses every day has given us a unique vantage point and understanding of how one expansion often leads to the need for another. For instance, moving into a new facility can create the need for new equipment. Or, new equipment can create the need for additional warehouse space. That’s why we see so many repeat borrowers with the 504 Loan Program. Honestly…facilitating continued growth is what this program was created to do and the mission of our non-profit organization is to advocate for small businesses. We know it’s not the big-named corporate businesses making the biggest impact on the economy…it’s you, the hard-working entrepreneurs serving our local communities!


For more information, Download: Borrower’s Expansion Reference


Why Growth Corp?

Because we help get deals done. Growth Corp is the largest CDC in Illinois, the top 504 Lender in Chicago and a market leader in quality, consistent service. In addition, Growth Corp has earned an Accredited Lender status with SBA, which grants us the ability to expedite the processing of loan approvals and closings.  Contact any member of our Lending Team to discuss your goals and ideas.