The Lending Circle Releases Comparison Of SBA Lending Versus Short Term Loans

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With an expert niche in SBA lending, Sunovis Financial and its division The Lending Circle, understands the strengths and weaknesses of SBA loans. To help small businesses determine what makes more sense for them, the company reveals a comparison of traditional SBA loans and the new short term loan product they can provide.

The Lending Circle, a Division of Sunovis Financial

We have found that our SBA borrowers typically have decidedly different needs compared with the short term business borrowers. Having access to both types of helps our small business owners.

Sunovis Financial and its division, The Lending Circle, assist borrowers across the U.S. The company matches clients with the best lenders, and have a niche in the SBA loan products. Realizing that SBA loans do not work for all small businesses, the company offers many access to many types of loan products, including short-term loans. Often a small business has an immediate need for capital. Short-term loans can offer the solution, with different underwriting standards and faster close times than an SBA loan.

The Lending Circle compares the two loan types:

SBA borrowers are typically business owners with strong credit scores, a strong financial accounting and reporting system (including forward projections), and less of a time sensitivity to their borrowing needs. By contrast, the short term borrowers are often business owners with limited credit history or a history marred by negative factors, yet their business exhibits a strong cash flow. In addition, they have a need for quick access to capital, making their borrowing needs very time sensitive. In fact, sometimes a long-term business owner with a good credit score has an immediate need for cash.

In the application process, the SBA borrower will be required to provide extensive documentation to prove their credit worthiness and ability to repay the loan, along with a guaranty and collateral. Short term borrowers will be able to complete a short application process, and typically provide nothing more than 3 months of bank statements and/or credit card statements. While the entire SBA application process can take several months, short term loans can be approved in as little as 1 day, and loan funding can occur within 7 business days.

“We have found that our SBA borrowers typically have decidedly different needs compared with the short term business borrowers. Having access to both types of helps our small business owners. We provide loans no matter what the needs or circumstances of our clients,” said Terry Robinson, the President of Sunovis Financial. “Our mission is to help rebuild the U.S. economy through small business strength, one loan at a time.”

The average length of repayment for SBA borrowers is 60 months or longer, while the short term borrower typically pays off their loans within an average of 12 months. Repayment for SBA loans is done monthly, and it is a manual process. This requires more stringent accounting to assure that the business has the necessary funds to pay the loan each month. The new short term loan product is repaid on a daily basis via automated payments, meaning there is no need for longer term planning in the repayment of the loan.

SBA loans require collateral or a down payment against the loan, typically 10-15% of the loan amount. The short term loans offered through Sunovis have no collateral requirements. However, SBA loans are available for much larger amounts; in some cases, as much as $5 million can be borrowed via an SBA loan. The short term loans, on the other hand, have an upper limit of $150,000. Interest rates are more advantageous with SBA loans and higher with short-term loans.

Small businesses can turn to Sunovis Financial and The Lending Circle no matter what their lending needs require, and be assured that a loan can be identified to suit their needs.

About Sunovis Financial and its division The Lending Circle:

Our mission is clear: We help small businesses and borrowers compete and succeed in today’s world through appropriate financing channels. Our professionals help inform borrowers on a variety of lending options, with a specialization on SBA loans.

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Kathy Heshelow
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