Bay Area Small Business Finance- Frequently Asked Questions

Bay Area Small Business Finance

Frequently Asked Questions

Can your loan be used to refinance debt?

Yes we can refinance business debt i.e. business credit cards, business loans and lines of credit to be termed out.

Do you finance tenant improvements of construction projects?

If your business is located outside of SF or Oakland we will not fund construction deals or any portion thereof. If construction is involved, applicant must supply Certificate of Occupancy with completed application. If use of loan proceeds goes towards equipment which requires construction/permits, topic of reimbursement will be discussed.

Why haven’t I heard of Bay Area Small Business Finance?

Bay Area Small Business Finance is a new division of a well-established bay area small business lender, Oakland Business Development Corporation. Not many individuals area aware of non-bank community lenders. Those who do are typically bankers and other professionals or organizations that work with small businesses and often refer businesses to us when they are unable to help themselves.

Are you a bank or a predatory lender of some type?

We are neither. We are a non-profit, non-bank, community lender. We hold a charter from the State of California since 1979 as a 501(c)(3) community corporation. We are also highly regarded by the SBA as one of the nation’s leading SBA lender for non-bank, community development loans. Additionally, we are a licensed CDFI institution from the U.S. Department of Treasury. BASBF is focused on community development metrics such as job creation, blight reduction, and economic development.

 

On the other hand, we love banks! In fact, we urge you to connect with your banker before speaking to us. Why? Banks are able to offer a diverse array of credit products to meet almost every small business need and their rates are generally less expensive. Banks are also quicker to turn around a credit decision. Unlike us non-bank, community lenders, banks are able to offer depository accounts as well as business credit cards and lines of credit.

Is there a lot of documentation required to apply for an SBA loan?

We don’t think so. We define a start-up business as 0-1 year of full sales history. The requirements for obtaining start-up capital are slightly than for an existing business due to greater risks and limited business financial history.

 

How long does it take to get a loan?

About 30-45 days after we receive a completed application packet. The majority of delays typically result from incomplete materials or lack of preparedness from the applicant. Upon receiving an application packet, the most organized entrepreneur can typically submit the requested documents within one week – proper preparation is important. Certain situations require different documents to be submitted which can cause further delays such as having to obtain construction estimates from a contractor or filing for specific certifications and licenses related to the industry.

 

Our business is faced with an emergency situation and we’re in the need for a loan as soon as possible. Can Bay Area Small Business Finance help?!

Unfortunately not. A business in dire situations where immediate capital is needed is not a fit for the type of lending we provide.

Will you review our personal credit and financial profiles even though we are applying for a business loan?

Yes. we analyze both the personal/household financials of the borrower(s) and the business financials. Credit reports are also checked (personal and if applicable, business).

It seems the process of applying for an SBA loan is more involved than a non-SBA loan from a bank. Is this true?

Perhaps. Since we only provide SBA loans, which are funded by taxpayers’ dollars, we have the fiduciary responsibility to make the most prudent credit decisions based on the small business population we service. Therefore, additional documentation may be requested to support a fair and balanced credit decision based on the applicant(s) personal and business situation(s).

With such a loan loss rate, is Bay Area Small Business Finance taking enough risks in lending to local small businesses?

Yes. We prefer to lend to 27 non-bankable, low-medium risk borrowers than a single high-risk one. This allows us to deploy capital responsibly to a higher number of small businesses.

Does Bay Area Small Business Finance lend to start-up businesses?

Yes. We define a start-up business as 0 – 1 year of full sales history. The requirements for obtaining start-up capital are slightly higher than for an existing business due to greater risks and limited business financial history.

May I purchase a franchise with an SBA loan?

Yes, as long as it’s an eligible franchise approved by the SBA. For non-SBA approved franchises, it will be your responsibility to provide certain documentation from the Franchisor per our request (if we are able to move forward with the lending request). We will submit the necessary documentation to the SBA for review which may take them several weeks or so.

May I purchase an existing business with an SBA loan?

Yes. However, as the lender, we do reserve the right to determine if acquiring the business is sensible. We will request the buyer to obtain certain business financial documentation from the seller for our review. (Please visit the ‘Purchasing an Existing Business’ link under the Be Prepared section of our website for more information).

We’ve had prior business losses. Can we still apply for a loan?

Yes, as long as the losses were reasonable and there are other mitigating factors where we feel comfortable enough to know additional capital will benefit (not burden) the business.

What are your interest rates?

Please visit the Business Loans section of our website for the most up-to-date information about our loan products.

If you provide loans up to $250,000, why did my banker define Bay Area Small Business Finance as a “micro-lender”?

The term “microloan” has been diluted over the years and defined differently depending on the source. For example, international organizations that provide micro-loans range from $50 to $5,000. However, the SBA defines it as $50,000 and below. On the otherhand, banks define it as loans below $250,000 and in some instances, $500,000.

Does the SBA offer special loans to minority and women-owned businesses?

No. This is a common misconception. Women and minority-owned businesses must meet the same qualifications as all other applicants.

What if our business needs to borrow less than $25,000?

Unfortunately we do not entertain loan requests lower than $25,000. However, there are a number of lenders who are able to. We suggest contacting your bank, local SCORE office, a Small Business Development Center, visiting the SBA.gov website, or conducting an Internet search to determine other lenders that are a better fit for lower loan amounts.

What if our business needs to borrow more than $250,000?

It may not be the best fit for us. However, it can also depend on how the debt and/or equity will be structured.

Our business is not located within the nine San Francisco Bay Area counties. May we still apply for a loan through Bay Area Small Business Finance?

Unfortunately not. However, your local bank, SCORE office, and Small Business Development Center may have other lending resource suggestions in your area. The SBA.gov website or the Internet may also yield favorable results.

Are secondary (or alternative) sources of income required?

For start-up businesses, yes. We want to make certain the entrepreneur is able to cover its household/living expenses in the event the business is unable to meet its projected net revenues. Other sources of income may also be required for existing businesses with historical losses or, if business cash flow is minimal.

I currently work in a different industry than the business I plan to open. Will this be an issue?

Same industry experience is always preferred unless the entrepreneur(s) are able to complete training/courses directly related to the business.

Is Bay Area Small Business Finance a government organization?

No. Bay Area Small Business Finance is an operating division of Oakland Business Development Corporation; a non-profit, Community Development Financial Institution with no affiliation to federal or state government agencies.

What type of businesses have you financed?

Our organization has experience lending to a variety of retail, manufacturing, distribution, food and professional service enterprises. Ineligible businesses include:

Passive Businesses
Landlords
Real estate investors
Rental real estate
Apartments
Shopping centers
Lenders
Life Insurance Companies
Government-owned Businesses
Businesses Located in Foreign Countries
Pyramid Sales Plans
Multi-Level Marketing Structures
Gambling Entities
Loan Packagers
Illegal Businesses
Speculative Businesses
Political Businesses
Businesses or Organizations Promoting Religion
Consumer Cooperatives
Businesses Providing Prurient Sexual Material
Businesses that Restrict Patronage (i.e., women’s only health clubs)
Non-Profit Organizations
Businesses with Prior Loss to the Government
Mortgage Brokers

Why haven’t I heard of Bay Area Small Business Finance?
Bay Area Small Business Finance is a new division of a well-established bay area small business lender, Oakland Business Development Corporation. Not many individuals are aware of non-bank community lenders. Those who do are typically bankers and other professionals or organizations that work with small businesses and often refer businesses to us when they are unable to help themselves.
Are you a bank or, a predatory lender of some type?
We are neither. We are a non-profit, non-bank, community lender. We hold a charter from the State of California since 1979 as a 501(c)(3) community corporation. We are also highly regarded by the SBA as one of the nation’s leading SBA lender for non-bank, community development loans. Additionally, we are a licensed CDFI institution from the U.S. Department of Treasury. OBDC is focused on community development metrics such as job creation, blight reduction and economic development.
Does Bay Area Small Business Finance offer lines of credit or credit cards?
No. OBDC offers only SBA term loans.
How stable is your Bay Area Small Business Finance?
We are proud to boast finishing our most recent fiscal year at a loan loss rate of 1.2% while being ranked as one of the top SBA Community Advantage lenders in the country.
Is there a lot of documentation required to apply for an SBA loan?
We don’t think so. It’s as streamlined as it can be for us to make a prudent loan decision. Obtaining the requested information allos us to verify that the loan request is sensible and will not put the applicant in a position of unmanageable debt that can negatively impact their credit and lifestyle long term.
How long does it take to get a loan?
About 30-45 days after we receive a completed application packet. The majority of delays typically result from incomplete materials or lack of preparedness from the applicant. Upon receiving an application packet, the most organized entrepreneur can typically submit the requested documents within one week – proper preperation is important. Certain situations require different documents to be submitted which can cause further delays such as having to obtain construction estimates from a contractor or filing for specific certifications and licenses related to the industry.
Our business is faced with an emergency situation and we’re in the need for a loan as soon as possible. Can you help?
Unfortunately not. A business in dire situations where immediate capital is needed is not a fit for the type of lending we do. It must be noted, we are not a lender of last resort (these type of businesses are ineligible about 99% of the time).
It seems the process of applying for an SBA loan is more involved than a non-SBA loan from a bank. Is this true?
Perhaps. Since we only provide SBA loans, which are funded by taxpayers’ dollars, we have the fiduciary responsibility to make the most prudent credit decisions based on the small business population we serve. Therefore, additional documentation may be requested to support a fair and balanced credit decision based on the applicant(s) personal and business situation(s).
Do Bay Area Small Business Finance lend to start-up businesses?
Yes. We define a start-up business as 0-1 year of full sales history. The requirements for obtaining start-up capital are slightly higher than for an existing businesses due to greater risk and limited business financial history.
May I purchase a franchise with an SBA loan?
Yes. However  as the lender, we do reserve the right to determine if acquiring the business is sensible. We will request the buyer to obtain certain business financial documentation from the seller for our review. (Please visit the ‘Purchasing an Existing Business’ link under the Be Prepared section of our website for more information.)
We’ve had prior business losses, can we still apply for a loan?
Yes, as long as the losses were reasonable and there are other mitigating factors where we feel comfortable enough to know additional capital will benefit (not burden) the business.
What are your interest rates?
Please visit the Business Loans section of our website for the most up-to-date information about our loan products.
What if our business needs to borrow less than $25,000?
Unfortunately we do not entertain loan requests lower than $25,000. However, there are a number of lenders who are able to. We suggest contacting your bank, local SCORE office, a Small Business Development Center, visiting the SBA.gov website, or conducting an Internet search to determine other lenders that are a better fit for lower loan amounts.
What if our business needs to borrow more than $250,000?
It may not be the best fit for us. It can also depend on how the debt and/or equity will be structured.
Our business is not located within the nine San Francisco Bay Area counties. May we still apply for a loan through Bay Area Small Business Finance?
Unfortunately not. However, your local bank, SCORE office and Small Business Development Center may have other lending resource suggestions in your area. The SBA.gov website or the Internet may also yield favorable results.
Are secondary (or alternative) sources of income required?
For start-up businesses, yes. We want to make certain the entrepreneur is able to cover its household/living expenses in the event the business is unable to meet its projected net revenues. Other sources of income may also be required for existing businesses with historical losses or, if business cash flow is minimal.
I currently work in a different industry than the business I plan to open. Will this be an issue?
Same industry experience is always preferred unless the entrepreneur(s) are able to complete training/courses directly related to the business.
What type of businesses have you financed?
Our organization has experience lending to a variety of retail, manufacturing, distribution, food and professional service enterprises. Ineligible businesses include:
Landlords
Real estate investors
Rental real estate
Apartments
Shopping centers
Life Insurance Companies
Government-owned Businesses
Businesses Located in Foreign Countries
Pyramid Sales Plans
Multi-Level Marketing Structures
Gambling Entities
Loan Packagers
Illegal Businesses
Speculative Businesses
Political Businesses
Businesses or Organizations Promoting Religion
Consumer Cooperatives
Businesses Providing Prurient Sexual Material
Businesses that Restrict Patronage (i.e., women’s only health clubs)
Non-Profit Organizations
Businesses with Prior Loss to the Government
Mortgage Brokers