Small businesses are a vital segment of the economy that one cannot ignore. They stimulate tremendous growth in the surrounding area and aid in the development of local markets. When something is beneficial to the country, the government makes sure that it is adequately addressed and catered to.
The Atlantic Union Bank, for example, provides small businesses with some of the most thoughtfully designed loan programs available. That is correct; you read that correctly. This article is for you if you own a small business, want to own a small business, or buy an already established company.
Because of the SBA-specific guidelines, the process is much more straightforward than it appears. This guide covers everything you need to know about SBA loans, including interest rates, fees, and other important information.
An Overview of the Loans Offered by Atlantic Union Bank
Atlantic Union Bank, with its headquarters in Richmond, Virginia, and its origins in Virginia dating back to 1902, is a financial institution. Atlantic Union Bank has gone through various phases, including recessions and natural disasters, the Civil War, and economic depressions. Nothing, however, could prevent the bank from thriving and providing services to its customers.
The Atlantic Union Bankshares, Inc. was established in 1987 as a publicly traded corporation and reached the $1 billion mark in total assets in 1988.
This bank has 211 banking offices and 20 loan offices spread across states like Virginia, West Virginia, Maryland, Pennsylvania, Ohio, North Carolina, South Carolina, and Washington, DC.
Atlantic Union Bank is a well-known brand in the loan industry, and if you're looking for one, you have come to the right place!
Atlantic Union Bank Provides Several Different Types of Loans
Selecting the most appropriate loan plan can significantly improve the situation for you and your company. To do so, you must first understand all of the options available to you.
If you are just getting started with everything, you don't have to be concerned in the least because the Atlantic Union Bank will guide you through the process step by step. Furthermore, the bank assists its customers in selecting plans that will provide the most financial support for their specific needs and circumstances.
In addition, Atlantic Union Bank offers loans for small businesses of all sizes. The plans address various issues such as working capital lines of credit, upgrading to more advanced equipment, etc. The following are the loan options that the bank provides:
The Small Business Administration's 7(a) Loan Program
Like all other financial institutions, the Atlantic Union Bank provides loans to small businesses through the Small Business Administration loan programs. The SBA's fundamental guidelines calculate all interest rates and economic highs and lows.
Because the maximum loan amount for the SBA 7(a) program is capped at $5 million, this program is ideal for businesses with financing needs of up to $5 million. Unfortunately, this limit is non-negotiable, which means that the SBA plans may not be the best option for your company if your requirements are more significant.
There is a maximum guarantee rate of 85 percent for loans up to $150,000 and a maximum of 75 percent for loans greater than $150,000. Furthermore, the interest rate is negotiable. It is something that you and the bank will decide on together in the future. On the other hand, the interest rate cannot be higher than the maximum allowed by the SBA.
Now that you are aware of what SBA 7(a) is, here are some of the advantages that this loan program provides:
- Allows you to make upgrades and install necessary equipment without incurring additional costs.
- You can not only start a new business with the help of SBA 7(a), but you can also purchase already established businesses with the help of this program.
- Contributes to the refurbishment and modernization of the facility.
- It contributes to the expansion of business horizons.
- Debt consolidation
- SBA Express is a service provided by the Small Business Administration.
The Atlantic Union Bankoffers SBA Express loans with loan terms and conditions significantly less complicated.
- Because of the quick approvals and significantly less documentation required, SBA Express loans are the most hassle-free type of loan to obtain.
- Due to the rapidity and efficiency of the approval process, you can expect responses within 36 hours; however, response times for the SBA 7(a) application are approximately 8 to 10 business days.
- Furthermore, this is primarily for business owners concerned that they will not meet the eligibility requirements; otherwise, their average or poor credit history can benefit from this.
What are the Lending Criteria That the Bank Uses?
Obtaining loan approval used to be a time-consuming and aggravating process. Comparatively, if you look at the process today, it is much more straightforward and convenient.
But does this mean that you will not be required to meet any eligibility requirements? No, there are still a few things that the bank needs to consider before giving your loan the go-ahead. If you're curious about what these requirements are, keep reading:
- The company's size must be within the parameters set by the Small Business Administration.
- Businesses should only operate within the boundaries of the United States."
- It is a for-profit enterprise.
- A reasonable amount of equity in the owner's name to be used for future investments.
- The business has used resources that fall under the company's umbrella and personal and financial assets.
If your company falls into any of the following categories, it will be ineligible for the loan:
- Academic institution
- Pyramid sales strategies
- Non-profit organizations such as charitable trusts, religious organizations, and others should not be the target of your business.
- Rental properties, for example, are a type of real estate investment.
- Investing in lending ventures
There is absolutely no involvement in gambling activities of any kind, whether it is betting, casinos, horse racing, or other means.
Interest Rates, Fees, and Loan Options Available from Atlantic Union Bank
You are entirely incorrect if you are concerned that interest rates and fees will be extremely high and far beyond your financial means. The Small Business Administration (SBA) guidelines issued by the government ensure that the interest rate and fees are lower than the market conditions.
In addition, it is advisable to enquire about and read up on such complexities ahead of time to avoid any last-minute disagreements. Furthermore, it is always preferable to familiarise oneself with the terms before employing them.
Finally, keep in mind the interest rate varies depending on the size and terms of the loan, as well as your ability to negotiate!
The following are the interest rates for the SBA loan programs mentioned above:
Borrowers who repay their loans within seven years will pay a lower interest rate under SBA 7(a)
- Loan amounts of less than 25,000 dollars are subject to *Prime plus 4.25 percent
- Between 25,001 and 50,000 dollars - *Prime plus 3.25 percent of the total amount
- Amount of loan greater than 50,000 dollars - *Prime plus 2.25 percentage points
7(a) Interest Rates for Loans Repaid after Seven years - Small Business Administration
- Loan amounts of less than 25,000 dollars are subject to *Prime plus 4.75 percent
- Between 25,001 and 50,000 dollars - *Prime plus 3.75 percent of the total amount
- Amount of loan greater than 50,000 dollars - *Prime plus 2.75 percentage points
Loans for Small Business Administration (SBA)
The interest rates on SBA Express Loans are significantly higher, and they vary depending on the amount borrowed.
- An example is a loan of $350,000 for seven years at a prime rate of + 4.5 percent to + 6.5 percent.
No, the interest rates you pay do not take into consideration the fees you incur. So, yes, you may still be charged fees by the Small Business Administration and your lender. The amount of fees you must pay is determined by the loan's maturity date and the loan amount.
Furthermore, depending on the amount and terms of the loan, you may be required to pay a guarantee fee as well. The SBA has decided that there will be no systematic approach to addressing the fees issue, in which the bank will consider a loan amount between $500,000 and $1 million.
- The amount between $150,000 and $700,000 is eligible for a 3 percent fee
- Amounts between $701,001 and USD 1 million are suitable for 3.5 percent
- 3.75 percent is available for purchases of more than a million dollars
Additionally, if the loan amount is less than 150,000 dollars, the guidelines state that the bank will charge no guarantee fee. Nonetheless, if the amount exceeds $150,000, a 0.25 percent guarantee fee is applicable.
Fees for the Small Business Administration's Express Loan Program
At this time, there are no fees associated with the SBA Express Loan Program. Depending on the size and terms of the loan, the bank may impose a one-time guarantee fee in addition to the loan amount. It could be in the range of 2 percent to 3 percent.
The SBA Loan Application Procedure of Atlantic Union Bank
The application process for the Small Business Administration loan program is nearly identical in all banks. First, you should gather all of the necessary documents and permits, such as licenses and certificates.
You can also refer to the information provided in the following section if you are unsure what you might need to do. Before or during the application process for a small business loan at the Atlantic Union Bank of West Virginia, make sure to double-check the list.
- Obtain clarification on the most appropriate SBA program and then complete the application form for that program, if applicable
- Fill in the blanks with accurate personal and financial information supported by your original documents and certificates
- Obtaining a business certificate, permit, or license
- Proof of your ability to repay the loan in the form of business financial statements
- 'Annual financial report' (for one year)
- Income tax returns are a type of tax return (past three years)
- Assurances concerning affiliations and ownership
- Profit and loss statement for the last 180 days' worth of transactions
- All of the terms and conditions of a business lease (from the landlord) must be met.
- History and challenges of the company
- Previous history of loans (if any)
Suppose you are not establishing a new business but are instead purchasing an existing small business. In that case, the application process may be different.
- A final price statement/proof of purchase (Inclusive of equipment, inventory, contract, and machines)
- The most recent balance sheet
- Profit and Loss Accounts
- Income tax returns are a type of tax return (past two years)
- Bill of sale that has been offered
- Formal documents stating the terms and conditions of a transaction
- A summary of the loan options available from Atlantic Union Bank
If you are still concerned about the entire process, don't be; follow the instructions and watch as your small business grows and prospers alongside everyone else's business. However, to do so, you must first determine which SBA loan plan is most appropriate for your company. Consider your company's requirements carefully before making a decision.
Although the procedures have become much more straightforward in recent years, getting loans approved is still no walk in the park. The process is time-consuming and requires patience. If you do not have the necessary amount of time, you can choose an alternative method.
Yes, you did read that correctly. Look for reputable online lenders; they are your best bets for meeting your financial obligations when you are in a hurry.