With lenders tightening their belts and economic uncertainty swirling, experts say 2023 is likely to be a choppy year for business lending.
“It's a great program,” Feriancek said. “Most people think of USDA, and they don’t think of loans. They think of a slaughterhouse or think about what to eat.” That money should be coming soon, but the USDA shows it still has a backlog. While it had $741 million in funding for fiscal 2023 so far, it obligated about $711 million as of Jan. 25, 2023. It has just $30 million leftover, and above $913 million in loan guarantee requests. It is unclear how much of the fresh money will make its way to the program.
It can be used to acquire new businesses or machinery, or for working capital or inventory. IT can even be used as interim financing for construction before converting the loan to something more permanent. It can be for startup operations or simply to purchase a building for an existing business. Ultimately, it's flexible, Feriancek said .
Loans can be amortized up to 30 years for real estate, longer than what is typical for SBA loans. Anyone with a 20% or more ownership interest in the project must also provide a personal guarantee, he said.
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