Small businesses are an indispensable division of the economy. They bring around tremendous growth and foster the development of local markets.
When something is favorable for the nation, the government ensures it is well addressed and catered to. The United Bank, for example, offers small businesses some of the most well-crafted loan plans.
Yes, you have read that right. If you run a small business, wish to own a small business, or buy an already established one, this article is for you.
It is much simpler than it seems because of the SBA-focused guidelines. This guide highlights everything you should know about SBA loans, interest rates, fees, etc.
An Overview of United Bank's Loans
The United Bank was first opened in 1839 in Parkersburg on St. Patrick's Day. The bank at that time worked as the Northwestern Bank of Virginia.
United Bank has been through various phases, from recessions and natural calamities to the Civil War and depressions. But, nothing could keep the bank from thriving and serving its clientele.
The United Bankshares, Inc. became a publicly held company in 1987 and hit a total asset mark of $1 billion in 1988.
Presently, these shares are worth $26 billion with 211 banking offices and 20 loan offices across locations like Virginia, West Virginia, Maryland, Pennsylvania, Ohio, North Carolina, South Carolina, and Washington, D.C.
The bank is a trusted brand name for loans, and if you are looking for one, you're in the right place!
Types of Loans Offered by United Bank
Selecting the appropriate loan plan can really escalate things for you and your business, and for that, you should first understand what all options are on the table.
If you are just starting out with everything, you do not have to worry even a tad bit because the United Bank will walk you through the process step by step. Furthermore, the bank helps its clientele choose plans that provide the best financial support to their requirements.
Furthermore, United Bank caters to small business loans. The plans serve several issues like working capital lines of credit, upgrading to advanced equipment, etc. Here are the loan plans the bank offers-
SBA 7(a) Loan Program
The United Bank, like all other banks, offers loans to small businesses through the SBA loan programs. All the interest rates and financial highs and lows are based on the basic SBA guidelines.
If your business has requirements of up to 5 million dollars, the SBA 7(a) is for you because the maximum loan amount for this program is capped at $5 million. Unfortunately, this limit is non-negotiable, so the SBA plans might not be the best for your business if your needs are more.
With the maximum guarantee rate of 85% for loans up to $150,000 and 75% for a loan amount exceeding $150,000. Furthermore, the interest is negotiable, and it is something for you and the bank to mutually decide. However, the interest rate must not surpass the SBA maximum.
Now that you know what SBA 7(a) is, here are some benefits that this loan plan brings along:
- Allows you to invest in upgrading and to install essential equipment.
- With the help of SBA 7(a), you can not only establish a new business, but it allows you to buy already established enterprises as well.
- Helps in refurbishing and modernizing the facility.
- Helps in expanding the business frontiers.
- Refinancing debt
Next up, the United Bank provides SBA Express loans with much less complicated loan terms and conditions. SBA Express is the kind of loan that happens hassle-free, given the quick approvals and substantially less documentation.
The approvals are so quick and efficient that you can expect responses within the first 36 hours; the same response time for the SBA 7(a) is around 8 to 10 days.
Furthermore, this is primarily for the business owners who fear they might not meet the eligibility requirements otherwise, given their average or poor credit history.
What Lending Criteria Does the Bank Have?
In the past, getting loans approved was an irksome, tedious task. In contrast, if you look at the process today, it is much simpler and convenient.
But does that mean you won't have to meet any eligibility criteria? No, there are still some things that the bank needs to consider before they signal your loan a green light. In case you are wondering what these requirements are, read on:
- The company size must meet the norms that fall under the SBA.
- The business should be functioning within the frontiers of the United States.
- Operates for profit
- Rational equity in the owner's name for prospective investments.
- The business has used resources falling under the company, personal and financial assets.
Your business will not be eligible for the loan if it is any of the following:
- Academic school
- Pyramid sales plans
- Your business should not be a non-profit organization like charitable trusts, religious organizations, or others
- Real estate investment such as rental properties
- Lending ventures
- Absolutely zero involvement in gambling activities, be it betting, casinos, race track, or other means.
United Bank's Interest Rates, Fees, and Loan Options
If you are worried that interest rates and fees might be sky high and far beyond your limit, you are extremely mistaken. The SBA guidelines issued by the government ensure that the interest rate and fees are lower than the market grounds.
Also, it is advisable to enquire and read about such intricacies beforehand to prevent any last-minute quarrels. Besides, it is always better to study the terms before perpetrating them.
And lastly, remember that the interest rate varies according to the size and terms and, of course, your negotiable skills!
Here are the interest rates of the mentioned SBA loan plans:
SBA 7(a) Interest Rates for Loans Repaid within a Time Period of Seven Years
- Loan amount of 25,000 dollars or less - *Prime + 4.25%
- Between 25,001 and 50,000 dollars - *Prime + 3.25%
- Loan amount more than 50,000 dollars - *Prime + 2.25%
SBA 7(a) Interest Rates for Loans Repaid after a Time Period of Seven Years
- Loan amount of 25,000 dollars or less - *Prime + 4.75%
- Between 25,001 and 50,000 dollars - *Prime + 3.75%
- Loan amount more than 50,000 dollars - *Prime + 2.75%
SBA Express Loans
SBA Express Loan has much higher interest rates, and they vary as per the amount borrowed.
- For a loan of $350,000 - 7 years - prime rate + 4.5% – 6.5%
No, the interest rates you pay do not account for the fees. So, yes, the SBA and the lender might still charge you for the fees. The fees you pay depend on the maturity date and the loan amount.
Furthermore, you might have to shell out a guarantee fee based on the loan amount and terms. The SBA has ruled out a systematic way to address the fees issue, according to which a loan amount between
- $150,000 and $700,000 is qualified for 3% fee
- $701,000 and 1 million USD is qualified for 3.5%
- More than a million dollars is qualified for 3.75%
Additionally, the guidelines affirm no guarantee fee if the loan amount is cited as less than 150,000 dollars. Nevertheless, an amount above $150,000 is eligible for a 0.25% guarantee fee.
Fee for SBA Express Loan Program
Presently, there are no fees for the SBA Express Loan Program. However, a one-time guarantee fee might be applicable depending upon the size and terms of the loan. It could be around 2% to 3%.
United Bank's Application
The application procedure for the SBA loan program remains quite similar in all the banks. For starters, you can begin by collecting all the requisites like the documents and permits.
And if you feel unsure about what you might need, just refer to this below, and you will be good to go. Do crosscheck with the list before or while applying for a small business loan at the United Bank, West Virginia.
- Get clarification of the suitable SBA program and complete the application form for the same.
- Fill in valid personal and financial information that your original documents and certificates can support.
- Business certificate/permit/license.
- Business financial statements as proof of your ability to repay the loan
- Annual financial report (for one year)
- Income tax returns (past three years)
- Guarantees of affiliations and ownership
- Profit and Loss statement with the record of last 180 days
- Business lease (from the landlord) with all the terms and conditions.
- Business history and challenges
- Past loans history (if any)
The application process might vary if you are not establishing but buying an already established small business instead.
- A final price statement/proof (Inclusive of equipment, inventory, contract, and machines)
- Latest balance sheet
- Profit and loss statement
- Income tax returns (past two years)
- Proffered bill of sale
- Papers affirming terms and conditions of sale
Summary of United Bank's Loan Options
If you are still worried about the whole process, don't be; just follow the instructions and witness your small business flourish just like anybody else's. However, for that, you must know the most suitable SBA loan plan for your business. Closely comprehend your business needs and then pick.
Although the procedures have become much simpler now, getting loans approved is no cakewalk. It requires loads of paperwork and demands patience, and if you do not have the required amount of time, you can opt for alternative ways.
Yes, you read that right. Look for reliable online lenders; they are the best options for meeting urgent financial requirements.