Big Opportunity for Small Business Financing

Travis Andry, First Vice President—Commercial Lending

Travis AndryGrowing a small business into a larger one can take more than long hours and determination. Often, it takes financing.

When it comes to sources of funding, small business owners have more options than ever before thanks to new online sources. But for all the excitement of such easily accessed solutions, the results may not be what you’d expect, or what your small business needs.

Getting More Done for Less
Despite being regulation bound, a bank may actually be able to do more to help your company.

Because Old Second’s business model is relationship based, we get to know you, your company and, most importantly, your goals. We are also likely to be able to provide you with your lowest-cost financing option.

That’s because when you reach out to a community bank, you end up with a customized loan. For example, at Old Second, there are no standard loan products. Every financing solution is custom fit to each firm’s cash flow….and growth.

And for businesses that qualify, we can also build these solutions using a variety of lower-cost sources, including SBA loans (which benefit from government incentives offered by the Small Business Administration).

Myths and Realities of SBA Loans
Some companies avoid SBA financing due to the misperception that the loans are intended for troubled companies. That’s not the case. SBA borrowings are beneficial to qualifying companies and don’t endanger the ability to borrow in the future through other channels.

Another common misperception about SBA loans arises over the size of companies that are eligible for the program. The SBA definition of “small” is rather generous.

SBA uses two size standards. For manufacturing concerns, a company is considered “small” if it has no more than 500 employees. For nonmanufacturing businesses, the agency defines firms as small where average annual receipts don’t exceed $7.5 million.

The size of an SBA loan can also accommodate a broad range of needs. For 7(a) loans in particular, which accommodate a wide range of purposes, loans are made to a maximum of $5 million. There is no minimum amount. The average loan amount, according to the SBA, was $337,730 in 2012.

Uses and Misuses: SBA 7(a) loanThe terms of an SBA loan are also hard to beat. Maturities are based on the ability to repay. Interest rates are negotiated with the lender but subject to SBA maximums.

The length of the approval process varies, but with the SBA Express product, decisions are typically made within 36 hours.

To learn whether an SBA 7(a) loan or some other financing arrangement would be appropriate for your business, talk to your banker.

Old Second Bank: Home Equity Loans

Want to remodel your kitchen, take your dream vacation, upgrade your old car and get a new one? What’s stopping you? If you need the money, our home equity loans just might be the answer.

Newlyweds Jackie and Jeff are expecting their first baby and with the news, they found themselves in a 9-month time and money crunch to get things finished around the home. That’s when they turned to us. By taking a home equity loan, Jackie and Jeff were able to ease their minds and begin remodeling their kitchen before their baby girl arrives. By applying right away, they also received a special bonus!

Find out how you can apply for a home equity loan and get one step closer to your dreams. Visit us at: