Whether you want to expand your business or start a new one, you will need the right financing to support it. One of the best solutions for this is choosing small business loans.
There is more to small business loans in terms of financial flexibility. It can even help you cover the everyday expenses of your business and payrolls, depending on the type of loan you opt for.
Plus, these loans can help you avoid giving control of your business to equity partners or other funding sources.
Simmons Banks, a leading bank in the country, offers these small business funds. Besides, the bank follows SBA guidelines to make it easier for you to access capital.
So, if you wish to need any financial aid for your small business, you are at the right place. This article will shine light upon everything you need to know about small business loans at Simmons Bank.
An Overview of Simmons Bank's Loans
Simmons Bank was founded in Pine Bluff, Arkansas, in 1903. This bank is the primary subsidiary of the bank holding company Simmons First National Corporation. They have operations in Arkansas, Missouri, Kansas, Tennessee, Oklahoma, and Texas.
The bank has approximately 23.4 billion dollars in total assets. They now have over 2,800 associates in about six states. Further, they have provided loans of all kinds for more than a hundred years.
This bank provides SBA loans for lower down payments and flexible terms for people who want to start or expand their small businesses. Moreover, they offer a comprehensive suite of services and products that can meet your business needs.
Simmons Bank is an SBA Preferred Lender in all 50 states. They function as a direct agent on behalf of the Small Business Administration to expedite the loan process. Besides, they make the entire loan process accessible and simple.
So, it is no wonder numerous small businesses trust their local Simmons Bank branch for all their banking needs!
Types of Loans Offered by Simmons Bank
Finding the right small business loan can be overwhelming, yet it is crucial to do so. However, you can make it easier for you by understanding the benefits and drawbacks of the type of loan on offer.
Opting for the right financing solution for your small business can help you meet your requirements while cutting overall costs. So, take a closer look at the type of loan this bank offers.
When you have enough information about your options, you can assess them better. With better assessment, you can make smarter choices.
Here's a look at the types of loans offered by Simmons Banks for you to analyze:
This program is one of the most beneficial loan programs for small businesses. Under 7(a), you can receive up to 5 million dollars with variable interests.
- You can use the proceeds for the following:
- Expansion, renovation, new construction, or purchase buildings
- Invest in equipment, machinery, and fixtures
- Seasonal line of credit
- Working capital or starting a business
- Refinance debt for compelling reasons
- Leasehold improvements
7(a) Small Loans
7(a) Small Loans are similar to the 7(a) loan, but the maximum loan amount is 350,000 dollars. So, except for the maximum amount, all the criteria are the same as above.
SBA Express is an expedited, amortized loan for small businesses. Your business can receive up to 1,000,000 dollars per notice.
You can use this loan for revolving lines of credit or a term loan. This loan will generally have more interest rates than 7(a) loans.
SBA Express Loans to Veterans
This loan is processed under SBA express. However, it is a new measure by the government to help veterans get small business loans. Plus, the borrower's upfront fee is permanently zero.
Under this loan, you can receive up to 5 million dollars. You can use the proceed for revolving lines of credit or a term loan.
With a 90% guarantee, you can receive up to 5 million dollars with international trade. You can use this loan for the following:
- Permanent working capital
- Equipment, facilities, inventory, and more
- Land and buildings
- Debt refinance related to international trade
Export Working Capital Program
With Export Working Capital Program, you can receive up to 5 million dollars. The maturity period for this loan will be about a year or less usually. However, it can go up to 3 years.
You can use this loan as short-term working capital. It can be asset-based or transaction-based. Plus, you can also support letters of credit.
Next up, Simmons banks provide Export Express loans for small businesses. The maximum loan amount is 500,000 dollars with LOC up to 7 years. You can use it for the same things as SBA Express in addition to standby letters of credit.
The maximum loan amount for this loan ranges from 5 million to 5.5 million dollars. The amount will depend on the type of business. The proceeds of this loan go to:
- Lender (non-guaranteed) financing
- Long-term, fixed-asset loans
504 Loan Refinancing Program
504 Loan Refinancing Program is the same as the 504 loans. The proceeds are used for Refinancing Qualified Debt and other secured debt.
Non-7(a) Loans Microloans
The maximum loan amount for non-7(a) Loans Microloans is up to 50,000 dollars. You can use the loan money for any of your business needs except real estate. Some of them include:
- Purchasing supplies, machinery, fixtures, and equipment
- Use it as working capital
- Chose to refinance debt
What Lending Criteria Does the Bank Have?
Getting a loan approval was very difficult in the past, especially for a small business. With SBA, it has become easier.
In addition, the banks have made the process more organized, which can help themselves as well as the business owners. Therefore, you and your business will have to meet certain eligibility criteria.
Now, it's time to take a look at the eligibility criteria of Simmons Bank. The criteria may differ for each type of loan, yet the overall picture remains the same:
The business size must fall under the SBA guidelines of small business
- Operates for profit and within the borders of the United States
- Show good character and credit score
- Should have the ability to repay the loan
- Rational equity in your (business owner) name for prospective investments
- Must have used resources falling under the personal, financial, and company assets
The business will not be eligible if your business is any of the following:
- Non-profit organizations such as religious organizations, charitable trusts, and others
- Academic schools
- Pyramid scheme plans
- Lending ventures
- Real estate investment such as rental properties
- Involvement in gambling activities such as betting, casinos, and race tracks Simmons Bank's Interest Rates, Fees, and Loan Options
Simmons Bank's Interest Rates, Fees, and Loan Options
Small business loans are designed to help businesses that do not have access to all that much capital. Therefore, the interest rates will also be feasible to help the business sustain it.
Furthermore, SBA guidelines ensure that the interest rates are fair to the businesses as well the banks.
Even though the interest rates are not sky high, it is important to know how it works before going all in. So, to help you with that, this section breaks down the interest rates and fees Simmons Bank offers.
Most importantly, remember that these rates vary for each loan, and they are negotiable.
7(a) Loan Program, 7(a) Small Loans and CAP Lines Interest Rates
For loans less than 7 years:
- Maximum loan amount up to 25,000 dollars - prime + 4.25%
- Loan amount ranging between 25,001 and 50,000 dollars prime + 3.25%
- Amount over 50,000 dollars - Prime + 2.25%
For 7 years or longer:
- Maximum loan amount up to 25,000 dollars prime + 4.75%
- Loan amount ranging between 25,001 and 50,000 dollars - Prime + 3.75%
- Over 50,000 dollars - Prime + 2.75%
SBA Express, SBA Express Loans to Veterans, and Export Express Interest Rates
- Loan amount 50,000 dollars or less - Prime + 6.5%
- Over 50,000 dollars - Prime + 4.5%
International Trade and Export Working Capital Program Interest Rates
International Trade has the same interest rate models as 7(a) loan programs. With Export Working Capital Program, it does not have an SBA maximum interest rate cap. However, SBA monitors the reasonableness of the rates.
504 Loans and 504 Loan Refinancing Program Interest Rates
The interest rate for 504 Loans is fixed. The rate is established when loans with debenture-backing are sold.
CDC loans of up to 10,20, to 25 years have term fixed interests. However, unguaranteed financing may have shorter terms for the loans. In such cases, the interest rates are adjustable.
Non-7(a) Loans Microloans
You can negotiate the interest rates for Non-7(a) Loans Microloans with the intermediary. However, it is subject to 7.75% to 8.5% interest rates or more. In addition to that, you will have to pay the intermediary cost of funds.
The interest rates do not cover the fees you have to pay for the loan. So, the bank and the SBA will charge you fees. It depends on the loan amount, loan type, and maturity rate.
The guarantee feed for a loan under the 7(a) program with Simmons bank will cost you a guaranteed portion of the loan.
- For loans 150,000 or less - 2% (the bank may not retain more than 25% of the fees)
- For loans 150,001 to 700,000 dollars - 3%
- Loan amount 700,001 to 1,000,000 dollars - 3.5%
- Over a million dollars - 3.75% on guaranty portion
The ongoing lender fee will be 0.55%. Besides, the upfront guarantee fee for SBA Express Loans to Veterans is permanently zero. The guarantee fees for Non-7(a) Loans Microloans are also zero.
Guaranty fees for 504 Loans vary from the others as well. It is on a 50 basis point. Here's a breakdown of the fee structure:
- SBA guaranty fee on a debenture is 0.50%
- The annual service fee is 0.4517% of the outstanding balance
Simmons Bank's Application
The application process for a small business loan under the SBA is simple and straightforward in all banks. Accordingly, Simmons bank also works the same way. The process will go smoothly as long as your business meets all the criteria mentioned earlier.
You will have to start with gathering the important documents. Before the bank starts the processing, they will give you a list of required documents.
Yet, it is always better to gather things beforehand. So, you can go through the pointers below to know what you need for the process.
- Fill the application form for the chosen loan program under SBA
- Business certificate/license/permit
- Records of affiliation and ownership to the business
- Provide accurate information that adheres to the most recent government documents (especially financial information)
- Business Financial Statements that will demonstrate your ability to repay the loan
- P&L statement (should record the 180 days before the application)
- Income tax return for the past three years
- Financial statement (statement should project one year ahead)
- Business lease details
- History of business, the challenges it faces, loans applied, and loans received
The process will vary if you are purchasing an already existing small business. In such cases, you will have to provide the following documents:
- Latest balance sheet
- P&L statement
- Bill of sale
- IT returns for the past two years
- Documents affirming terms and conditions of sale
- Details on the asking price of the business, including equipment and machinery
Summary of Simmons Bank's Loan Options
SBA loans are a life-saver for small business owners. Plus, Simmons Banks offers a range of these loans with numerous benefits. The interest rates are also regulated, and it is negotiable.
With the required paperwork and some negotiation skills, you can take your business to the next level!
At the same time, it is not a cakewalk. Getting a green light for a small business loan may be simple, but it is not the easiest thing in the world. Moreover, it takes a lot of time for the loan processing to complete.
That can make it harder to finance the payroll or buy equipment on time. So, you can always opt for alternatives, and learning more about these alternative financing options is never a waste of time.