ExecptionalGeek - Business Loan Eligibility

For the topic of bank loan requirements, we in Learning Team D decided to use Chase Bank as our subject. Chase Banks has their own criteria when it comes to approving a business loan. In order to get a direct understanding of banks loan requirements one of our team members called a sales specialist with Chase Bank by the name of Jaro Garcia. We had several questions for the bank for example, what criteria do you look for when a business applies for a small business loan? What information will the entrepreneur need? And also what is the average amount of a small business loan?

We realized getting financed from Chase Bank is mainly about the numbers. In order to get a loan, Chase Bank first check ones business history, credit score, net worth, and cash flow analysis based on tax returns. Also one must have a registered business, Employee Identification Number, and also knowledge of the type of business they intend to own. The average loan amount for a small business given by Chase Banks range form as small as $5,000 to $250,000.

Upon reviewing the Small Business Administration’s website our team was able to learn some great information about what the eligibility requirements are for its 7(a) loan program eligibility. Based on the information presented there are certain businesses that are completely ineligible to have financing backed through this program such as speculative businesses, financial business engaged in lending (with some exceptions for some pawn operations), private clubs or organizations that restrict membership based on any reason other than capacity, and there are many more (Small Business Administration, n.d.).

However, despite the list of ineligibles there are provisions made through the program to provide backing to everything from fishing vessels, farmers, and even some franchise operations given that the franchisee still holds a controllable stake in the operation. Through the SBA’s backing with the 7a loan program, small businesses that would otherwise have difficulty obtaining funding through traditional means are given an opportunity to present their business proposition and potentially obtain loans with terms that are longer than market average and at interest rates below those that would be obtained by other means. All in all the 7a program is an excellent resource for businesses that are eligible to receive its benefits. So as a result many business owners take advantage of SBA loans because they use this as working capital or money to purchase equipment for the business.

References

Small Business Administration. (n.d.). 7(a) Loan program eligibility. Retrieved from https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/general-small-business-loans-7a/7a-loan-program-eligibility