| 1. |
What is a business loan and how does it differ from a personal loan? |
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The proceeds from a business loan are used for a business purpose and the source of repayment is the business income. Personal loans are for personal uses and are repaid from personal sources. |
| 2. |
What is an SBA loan and how do I get one? |
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An SBA loan is one that the U.S. Small Business Administration guarantees repayment of up to 85% of the loan. The SBA guarantee reduces our risk and allows us to lend money on projects that we might otherwise decline. These loans do not have below market rates. In fact their rates may be higher than the conventional loan rate. You do not need to ask for an SBA guarantee when you apply for a loan. Based on the risk of the project, ASI applies for the SBA guarantee. |
| 3. |
Does ASI offer 100% financing? |
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We require the business owner to be invested in the business. Generally speaking, we expect the borrower to own 10% to 30% of the assets of the business. |
| 4. |
Are there any types of projects that ASI will not finance? |
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ASI will not participate in illegal or speculative ventures and we do not do contract financing. |
| 5. |
Can I get a loan if my credit is not perfect? |
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Your credit does not have to be perfect but you should be up to date on all of you bills when you apply. In addition, if you ever caused a loss to the government by defaulting on a government backed loan, you will be denied credit for an SBA loan. |
| 6. |
Where can I get my credit report? |
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There are 3 credit reporting agencies that lenders use to evaluate your credit. You can get a copy of your credit report from them by phone or on line. They are:
Equifax: 1-800-997-2493; www.equifax.com
Experian: 1-800-397-3742; www.experian.com
Trans-Union: 1-800-888-4213; www.transunion.com |
| 7. |
How is the interest rate for my loan determined? |
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A number of factors are considered in determining the interest rate that you will pay. The common starting point for all interest charges is the prevailing market rate. That rate is then adjusted to account for the term of the loan, the risk of the project, the collateral for the loan, and your personal credit. |
| 8. |
How long does it take to receive funds from a loan? |
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Depending upon the complexity of the loan, it can take between 1 day and several months for a loan to be funded. |
| 9. |
My business is a corporation. Will I be expected to personally guarantee the loan? |
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Yes, you will be expected to personally guarantee to repay 100% of the loan and you may be asked to pledge your personal assets as loan collateral, regardless of the structure of the business. |
