What is NOT permitted when applying for SBA LOANS?
Author: David Gianella SBA Loans are the most common loans offered to small businesses. These programs are available through qualified lenders. Most banks and non-bank lenders offer these types of loans, but some are much better than others with SBA loans. Because these programs are offered through a non-bank lender or bank, if the institution does not want to extend this offer to the client (even if the client qualifies for the loan under the basic SBA 7(a) standard) the SBA cannot force the lender to give the loan to the customer. These loans can be either term loans or lines of credit. There are restrictions on how SBA funds may be used. The following uses for proceeds from an SBA loan are not allowed; • Refinance of existing debt, if the current lender may take a loss if the debt is not refinanced. • Partial purchase of an existing business, or partial change of ownership of a business, if the business will not benefit from the change of ownership. • Reimbursement of funds owed. Th
