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For instance, if Company A has $1 million in accounts receivable due in three months, it may opt to sell such receivables for $950,000 to a bank a $50,000 discount. Although it can be said that there are many small business loans that would not qualify for a conventional business loan had it not been for the supporting loan guarantee there is also a representation of business loan transactions that would qualify for either a conventional loan or an SBA loan option. The ultimate decision on which loan structure to select is typically made on a couple of factors: 1 The total amount of equity injection 10% to 30% SBA loans vs 20% to 50% Conventional Loan, 2 Loan Term/Amortization Up to 10 years and 25 years with real estate SBA loans vs 5 to 7 years and 25 years with 5 year balloon note with real estate Conventional Loan, 3 Interest Rate Prime 3. 25% as of August 09 + 2. 0% SBA loan vs an equivalent 10. 00% fixed rate Conventional loan, 4 timing Closing a business loan varies from lender to lender and each transaction is unique, however, as a general rule conventional loans will fund faster than an SBA loan structure. The "Good" benefit of the SBA ARC Loan Program is its intent to provide some immediate relief and support to small business operators experiencing cash flow operating problems during this challenging economic period. The benefit of the program to borrowers is the loan is interest free with no principal repayment for the first 12 months and the SBA will make the interest payments to the lender. The ARC loans require no collateral or closing fees and will be 100% guaranteed by the SBA. The "Bad" is that the maximum dollar amount is small and is very limited to the number of small business owners that it would have any meaningful impact. The "Ugly" is the program is on a first come first serve basis.

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Bell echoed those views, calling exports the “number one market expansion opportunity for small business and frankly for all business.

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how to apply business loans In the near term, foreclosures remain a pressing concern. As Kathleen Sowa, National Business Credit Executive at Bank of America, put it, “I think we need to get the foreclosures behind us…e still have a lot of people…that can’t… afford to be in their homes…etting that problem behind us is very important for small business to move forward. ” Mr. Bell agreed and called for a mechanism to clear distressed real estate: “There is a huge unrealized and unaddressed loan loss imbedded in the banking community from real estate…If we want to get the stuff out of the system…you’ve got to create type structure. ” In addition, FDIC Chairman Bair acknowledged ongoing efforts to restore the securitization market, which will take some time to heal: “ trying to come up with better standards to bring the securitization market back in a way that will appropriately align economic incentives and ensure high quality and transparency for investors buying those securities. But I think that’s going to take a while to do. ” For the longer term, Federal Reserve Chairman Bernanke identified the need to reform the government role in housing finance: “Obviously, the biggest problem…will be the Fannie and Freddie reforms which…will be critical to reestablishing the soundness of the residential mortgage market. ” Ensuring Credit is Available to Creditworthy Borrowers Lenders’ willingness to supply credit to small businesses was another key topic. Federal Reserve Chairman Bernanke noted early signs of improving sentiment among small business lenders: “t’s certainly still a very tight situation. But I think things have stopped getting worse and are looking a little better. ” Banks naturally tightened their lending standards as a result of the recession.

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Current assets are calculated as the sum total of the cash or cash equivalents, current inventory, accounts receivable, as well as marketable securities.

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One prominent peer to peer lender, Lending Club, has seen its small lending business double every year since 2007, having made more than 16,000 small business loans.