WORCESTER – At the Woostapreneurs Forum, Nadine Boone, SBA Lead Lender Relations, and Thomas L. Rose, Managing Director of the Worcester Commercial Banking Group, Commerce Bank & Trust Company, lead a workshop explaining the various direct loan and loan guarantees that can be provided by a bank and the SBA to help a small business grow and expand. Below are a few highlights from that discussion.

“Here’s how the SBA loan works. A small business applicant goes to the bank and the bank approves it subject to the SBA guarantee. Then the bank submits it to SBA. Just because the bank says you are SBA eligible, the SBA may disagree. There are no shortcuts.”

“Do you have some historical data and are your financials apparent and ready for the bank to see them? Are they endorsed by your CPA? Just because you produce tax forms does not mean the IRS ever saw them. We are going to need to contact the IRS and ask for transcripts. This is a requirement by law.”

“The SBA has preferred and certified lender programs such as through the Commerce Bank & Trust Company, which means Tom has a certain amount of authority and expertise to do the SBA guarantee program without coming to us first to ask us to underwrite every decision he makes. That’s a blessing and a curse because to whom authority is given there’s greater risk. So Tom’s decisions have to be on point with the guidelines. If your business went belly up, he would have to eat it.”

“The terms and interest rates are negotionable between you and the bank. The relationship is between the borrower and the bank. The SBA is relatively transparent unless if the bank sees that there is risk.”

“There is a cost to borrow money. The SBA charges the lender a fee and those fees are usually passed on to the borrower.”

“Right now we have 2 percent fee waiver program to encourage our lenders and other lenders to make small loans to your businesses.”