Does The SBA Limit The Types Of Loans For A Manufacturing Business?

With few exceptions, the SBA Regulations does not limit the industry or business where the funds can be used or how the funds are used as long as its for the business’ purpose.

Ineligible industries which cannot receive an “SBA Guarantee”: gambling, moral issues, non-profits are a few.   No “SBA Guarantee”, no SBA Loan from a Lender.

Otherwise, there is no “limited” or “limiting” types of loans with SBA Lenders and Lending.

There are two types of criteria used by a lender when your loan is reviewed:

SBA Regulations and Lender Underwriting Criteria. The Lender underwriting criteria is additional qualifications the lender uses in its underwriting to decide if you are eligible for a loan. The lending industry calls these additional underwriting criteria “overlays” as they are above and in addition to the SBA Regulations.

There are no specific underwriting limitations to funding a manufacturing company. And, the SBA Regulations are liberal in how financing can be used.

In my view a manufacturing company has the same manner of producing income as any other business and can be used as a metaphor for most types of businesses:

Cost of Goods
Sale of Goods
Receive Income

If you are a business with a minimum of twelve (12) months history of income and net profit, the business should be eligible for standard SBA Funding. If you are a start-up, you still can be eligible for funding.  However, there are specific criteria which a Borrower will need to know how to present to a lender.

Remember, the SBA Regulations are not the limiting factors, its the bank or lender where a Borrower is submitting the loan who have the additional overlay to the underwriting criteria. Local and In-State Banks usually are more conservative with their overlays then Regional and National banks and lenders.

You will need to contact several banks and/or lenders to gauge the way they look at your situation and the underwriting criteria which will be used to decide if you qualify for a loan.  Or, engage a mortgage broker who specializes in SBA Lending and knows the industry and lenders.

Contact for more information:

Joel Soforenko
Continental Finance Capital Corporation
Tel:    617-336-3215 x 5