By: Elena Mart

SBA loans can be a powerful tool for small business owners seeking financing—but navigating the process requires expertise. Shirley Polanco, an SBA lending specialist with Fidelity Bank, shares her insights into making the most of this opportunity.

In today’s competitive lending environment, small business owners face a growing array of financing options. Yet, SBA loans remain one of the attractive solutions for entrepreneurs looking to expand, acquire, or strengthen their operations. With low interest rates, favorable terms, and government backing, these loans offer a growth path—but accessing them isn’t always straightforward.

“SBA loans provide a level of support that conventional loans don’t,” says Shirley Polanco, a seasoned SBA lender with over five years of experience and $145 million in financing secured for her clients. “But they also come with a unique set of challenges that can trip up even the most experienced business owners. My goal is to make the process accessible and empower borrowers to succeed.”

What Makes SBA Loans Different?

Unlike conventional loans, SBA loans are partially guaranteed by the U.S. government. This guarantee reduces the risk for lenders, allowing them to offer lower interest rates, longer repayment terms, and more minor down payment requirements.

“These benefits make SBA loans a great option for small businesses, especially those without the extensive credit history or collateral that traditional lenders often require,” Polanco explains.

However, the government’s involvement also means SBA loans come with additional layers of scrutiny. Borrowers must meet stringent eligibility criteria and navigate a detailed application process that can take several months to complete.

“Patience and preparation are key,” Polanco says. “While SBA loans take longer to secure, the benefits are worth the effort for most businesses.”

Choosing the Right Loan

Polanco emphasizes that not all SBA loans are created equal. The two most popular programs—the 7(a) and the 504—serve different purposes and borrower needs.

• SBA 7(a) Loan: The most versatile option, the 7(a) loan can be used for working capital, business acquisitions, debt refinancing, and more. “It’s an all-around solution for many types of businesses,” Polanco says.
• SBA 504 Loan: Designed for major fixed assets like real estate or equipment, the 504 loan offers competitive rates and terms for borrowers with more specific needs.

Polanco advises business owners to think carefully about their goals before choosing a loan. “A client might come to me thinking they need a 7(a), but after we discuss their long-term plans, we find that the 504 is a better fit,” she explains.

The Importance of a Strong Application

When it comes to securing an SBA loan, preparation is everything. Polanco notes that lenders evaluate not only the borrower’s financial standing but also the strength of their business plan and the clarity of their funding request.

“Your application is your opportunity to tell a story,” Polanco says. “Lenders want to know why you need the money, how you plan to use it, and how it will help your business succeed.”

Key components of a successful application include:

• A detailed business plan: This should outline your company’s mission, market position, and financial projections.
• Specific use-of-funds breakdown: Borrowers should clearly explain how every dollar will be allocated, whether it’s for equipment purchases, hiring staff, or expanding operations.
• Realistic financial projections: Overly optimistic numbers can raise red flags. “Be honest and conservative with your projections,” Polanco advises.

The Role of the Lender

While much of the focus is on the borrower, Polanco stresses the importance of working with the right lender. Not all banks specialize in SBA loans, and an inexperienced lender can lead to delays or misunderstandings.

“Look for a lender with a strong track record in SBA financing,” Polanco says. “They should understand the nuances of the process and be able to guide you through each step.”

Polanco also highlights the value of clear communication. “A good lender will act as your advocate, helping you navigate challenges and keeping the process on track,” she explains.

Common Pitfalls to Avoid

Despite their many benefits, SBA loans can be daunting for first-time borrowers. Polanco identifies several common mistakes that can derail the process:

1. Failing to plan ahead: “SBA loans take time—often 60 to 90 days or more. Start the process early, especially if you’re working on a time-sensitive project.”
2. Underestimating documentation requirements: Polanco advises keeping meticulous records and being prepared to provide additional information as requested.
3. Choosing the wrong lender: Inexperienced lenders may not fully understand the SBA’s requirements, leading to unnecessary delays.

Looking Ahead

For Polanco, the most rewarding part of her work is seeing her clients achieve their goals. “There’s nothing better than helping a business owner secure the financing they need to take their company to the next level,” she says.

With her expertise and dedication, Polanco is committed to simplifying the SBA lending process and empowering entrepreneurs to thrive. “My goal is to make SBA loans accessible to everyone,” she says. “No deal is too complex if you have the right team supporting you.”

For small business owners navigating a competitive market, that team starts with a knowledgeable lender like Polanco.

If you’re ready to take your business to the next level and want someone who can navigate the tough stuff while advocating for you every step, connect with Shirley by clicking here: https://www.fidelitybanknc.com/sba-lending/team/shirley-polanco/

Disclaimer: This article is for informational purposes only and does not constitute financial, business, or legal advice. SBA loan requirements, terms, and approval processes may vary based on individual circumstances and lender policies. Readers should consult a qualified financial advisor or SBA lending specialist before making financing decisions. While efforts have been made to ensure accuracy, the lending landscape is subject to change, and applicants should verify current regulations and loan options with official sources.

Published by Tom W.