Why You Should Work With a SBA Preferred Lender

The key benefits of an U.S. Small Business Administration (SBA) loan include a lower down payment, longer loan terms to aid cash flow, and flexible collateral requirements.

Business borrowers often believe that SBA loans are more demanding and time-consuming than other bank-financing options. While this may be a common belief, borrowers should know that SBA loans do not require much more information than a conventional business loan, and the benefits are worth the extra effort.

SBA Preferred Lenders Support Various Business Needs

Since Frandsen Bank & Trust established an in-house SBA department in 2016, we have consistently earned the SBA's Preferred Lender status. What does this mean? We have designated authority from the SBA to approve and process our loans without having to send them to the SBA for their approval.

For further perspective, Frandsen has processed SBA loans for businesses in Minnesota, Wisconsin, and North Dakota that have existed for more than 100 years and with combined revenues more than $300 million. Here are just a few examples of how local businesses have used the SBA funds secured through Frandsen Bank & Trust.

Acquisition

The General Manager of a local company wanted to purchase the business where he had worked for the past 25 years. He didn’t have enough for a down payment to buy the company using conventional financing, as the project had a significant collateral shortfall. Frandsen Bank financed the acquisition using 10 percent cash equity, a 10 percent seller carryback note, and an SBA 7(a) loan.

Expansion

A small tonic manufacturer wanted to expand their physical location and marketing/distribution. Frandsen financed this project using an SBA loan with 10percent owner equity and a small city revolving loan fund.

Working Capital

An environmental consulting firm had been growing rapidly and needed working capital to finance its growth. Our SBA lender provided an SBA Express Line of Credit to help them grow their client base and meet their cash flow needs.

Equipment Purchases

A local machine shop needed additional equipment to expand its production capabilities for its clients. Frandsen funded 100 percent of the equipment purchase, which will allow for increased sales/profits for the company. The SBA funding leveled the playing field for this business, and it was able to purchase the same equipment used by larger machine shops.

Debt Refinance

A dental office had several loans with various amortizations and wanted to consolidate the loans into one payment. They also needed additional equipment and working capital. Frandsen lenders met these needs by providing an SBA 7(a) loan that saved them 33 percent on their existing debt and working capital (cash) and enabled them to stabilize cash flow while increasing their sales.

Startups

A customer of Frandsen approached one of our lenders with the idea of establishing a tree-trimming and removal business. The customer provided an in-depth business plan with detailed projections. In addition, the customer had a reliable credit history and funds to invest in the project. Their dream of owning a business came true with the assistance of an SBA 7(a) loan through Frandsen Bank.

About the U.S. Small Business Administration

The Small Business Administration was created by Congress in 1956 to “aid, counsel, assist and protect the interests of small business concerns; preserve free competitive enterprise; and maintain and strengthen the overall economy of our nation." (sba.gov) The SBA’s primary goal is to protect and grow America’s small businesses.
Frandsen has been able to serve its local communities by providing small businesses the financing they need and deserve.