If you’re a small business owner in search for funding, odds are you’re already familiar with Small Business Association (SBA) loans, as well as a few of the lenders who provide them. Celtic Bank SBA loans are among some of the most sought-after on the market, as the bank is among the 10 approved SBA lenders that give out the most business loans in the country.
There’s a lot to know before diving in any SBA loan application, whether for Celtic Bank SBA loans any other lender. The SBA loan approval process is lengthy, complex, and often takes a fair amount of preparation time. Plus, the lender you work with for your SBA loan does make a difference in your financial decision-making, which means that it’s important to determine if Celtic Bank SBA loans are the right fit.
We’ll break down what goes into the SBA loan timeline, considerations you have to make, and what goes into the application process. We’ll also provide you with an overview of why Celtic Bank SBA loans might be right for you, or if your best bet is to consider a few alternatives.
First: What Is an SBA Loan?
Before we dive into what makes Celtic Bank SBA loans unique, let’s cover the fundamentals of what SBA loans are in general and how they differ from other small business loans. The SBA loan program is designed to help small businesses access funding that they may otherwise have trouble getting from banks. Many banks are apprehensive about lending money to small businesses: The interest payments they get are small, and small businesses are usually riskier investments than large-scale companies.
There are three main kinds of SBA loans, with a few different subcategories within them. The most popular is the SBA 7(a) loan, which offers borrowers up to $5 million for a wide range of purposes. SBA 7(a) loans have several derivatives, the most essential being SBA Express loans. SBA Express loans offer up to $350,000 and can takes as few as 36 hours for approval (instead of 45 days). Other SBA loan types include microloans (up to $35,000) and real estate and equipment loans (which help businesses buy physical assets, such as property or machinery).
It’s important to note that the SBA does not give out loans itself. Rather, it works with certain lending partners to finance and oversee the loans that are part of the program. The SBA vets applicants and ensures that the loans will be repaid, which makes banks more willing to work with smaller companies. The SBA guarantees up to 85% of the value of your loan, which means that banks assume less risk when they lend to you (i.e. they know that they’ll stand a better chance of getting repaid). Your approval odds are therefore better, since you’re not on your own when you seek out financing.
The SBA expects more information and proof that you’re a good loan candidate in exchange for its guarantee, however. You’ll have to hand over a lengthy application that includes details about your personal finances, loans, outstanding debts, and work experience. The same goes for any loan co-signers, too. The SBA also wants to see a comprehensive business plan, stats about how long you’ve been in business, legal documents (such as your articles of incorporation), and collateral. In short, SBA loans require much more paperwork than other commercial loans, but they reward you for your efforts through a guarantee and lower interest rates.
What Makes Celtic Bank SBA Loans Different?
Not every SBA loan provider is created equal. Some banks approve more SBA loan applications than others, and Celtic Bank has a reputation for being SBA loan specialists. Celtic Bank SBA loans are available to borrowers across the country, as well, which makes it convenient for most small business owners to finance their growth.
Most Celtic Bank SBA loans have interest rates that range from 5.5% to 6% APR, which is more than competitive with other commercial loans. The interest rate for SBA Express loans hovers around 2.75% to 4.75%, since the loan total is smaller than other SBA loan products. The terms and maximum loan amount on Celtic Bank SBA loans are the same as you’d find at every participating lender: You can borrow up to $5 million and repay your loan back up to 25 years.
Celtic Bank doesn’t provide a ton of exact information on their closing fees for SBA loans. Since the SBA charges a guarantee fee to lenders for 7(a) loans, there’s a possibility that Celtic will pass this fee along to you. You’ll have to double-check with the lender to be sure.
The SBA does not charge your bank a guarantee fee for loans that are less than $150,000, which means you won’t have to include this charge in your overall loans fees. Otherwise, you should expect to pay anywhere from 0.25% to 3.5%. Celtic Bank SBA loans may also charge closing or processing fees, which are additional costs that the bank passes on to the borrower to cover the costs associated with the legwork behind making the loan happen. Celtic doesn’t list these fees online, however, so it’s unclear how much they might cost you.
Who’s Eligible for Celtic Bank SBA Loans?
The SBA’s qualifications for borrowers are the same, irrespective of which bank you go to for the loan itself. What does vary, however, are the terms that your bank may offer you. The SBA reviews every application on a case-by-case basis, but good candidates usually hit the following criteria:
1. Good to Excellent Credit
Although the SBA doesn’t have technical credit score requirements, the best candidates generally have personal credit scores of 650 or higher in order to qualify for SBA loans. The higher your credit score, the better your odds of approval.
2. Two or More Years in Business
You may be able to get approval for your SBA loan application if you’ve been in business for less than two years, but odds are in your favor if you’re more established. There are plenty of examples where the SBA has given the green light to companies that are in development stages, however.
3. $100,000 or More in Annual Revenue
The SBA prefers to lend to companies that have a track record of generating revenue. This is true for nearly every conventional loan, as well, as a moderate amount of revenue demonstrates that your company is successful enough to continue operating.
4. Management History, Employment, and Other Personal Characteristics
Personal qualifications are vague and vary between individual applicants. But the SBA loves to see candidates that have a good professional history, a record of positive financials, and a well-established track record with debt and loans. The more you can convey your professional prowess, the better your odds are for getting approved.
Bear in mind that the review process for Celtic Bank SBA loans may include other parameters, as well, since every lender requests different levels of detail and varied criteria to help them make decisions too. The best thing you can do to prepare for the Celtic Bank SBA loan approval process is to prepare a solid business plan, collect your personal financial information (including bank statements and tax returns), outline your business experience, and detail your company’s financial records.
How to Apply for Celtic Bank SBA Loans
There are two ways to begin an application for Celtic Bank SBA loans: online or over the phone. The bank offers a robust web platform that can help you through the introductory steps of the loan application process. You can also get the conversation started over the phone with one of Celtic Bank’s loan specialists.
Ultimately, like with all SBA loans, you’ll need to start somewhere. The best place to begin the process is online, even if you ultimately have to work with specific people at your lending institution. So long as you have your paperwork in order, you can at least begin the process through the bank’s website.
Alternatives to Celtic Bank SBA Loans
There are plenty of alternatives to Celtic Bank SBA loans, whether your SBA loan application was rejected, the terms aren’t a fit for your needs, or you simply don’t have enough time to wait out the long approval process.
The best thing you can do with any SBA loan is shop around. Banks will request different documents as part of your application and offer you different terms, as well. Don’t just apply with one lender—be sure to put in the extra legwork and apply with several lenders. You’ll still avail yourself to the great advantages that come with SBA loans, but you can avoid paying certain fees and might enjoy different interest rates with different banks.
Alternatively, if you don’t qualify for an SBA loan, there are still tons of options out there for you to get the financing you need. You can always seek out a commercial loan, which will give you access to credit in exchange for higher interest rates and shorter repayment periods.
You can also seek out alternative financing, which usually provides approval to applicants with a poor credit history at a higher markup. But no matter which option you choose, make sure that you’re getting the best value for your needs. Taking on debt is a daunting prospect for any business, and you’ll be paying off your loan for years to come. As long as you know all of your options—as well as the pitfalls to avoid—you can make your loan work for your goals.
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.