SBA Loans: Frequently Asked Questions

Merchants Bank Small Business Loans, Commerical Lenders

Are you thinking about starting a small business? Have you heard about the Small Business Administration and the loan programs it offers? You might be wondering if an SBA loan is right for you or simply how SBA loans work. Here are answers to frequently asked questions about SBA loans

1. What is an SBA loan?

While the Small Business administration oversees a number of loan programs, the SBA does not lend money itself. When you apply for an SBA loan, you’ll work with a local bank to receive financing for your project and a portion of the loan is guaranteed by the SBA.

SBA Loan programs include:

  • 7(a) Loan Program – The most common general small business loan offered by the SBA.
  • Microloan Program – Small, short-term small business loans.
  • Real Estate & Equipment Loans or CDC/504 Loan Program – Loans for real estate and equipment.
  • Disaster Loans – Low interest loans to repair or replace items damaged in a disaster.

Learn more about these SBA loan programs and eligibility on the SBA website.

2. Should I apply for an SBA loan or traditional bank loan?

Which loan is right for your business depends on a number of factors. First, you’ll want to know which SBA loan programs you may or may not qualify for. In addition, you’ll want to compare the SBA loan programs versus a traditional commercial loan. While an SBA loan might not be a fit for every business, it may provide certain benefits over traditional loans, in certain situations, including:

  • Longer terms
  • Lower down payments
  • Increased cash flow
  • Flexible repayment options

As an SBA Preferred Lender, Merchants Bank has experience helping businesses choose between SBA and traditional commercial loans. Your local Merchants Bank Commercial Banker can guide you through our options to find the right loan program for you.

Use SBA’s Online Loans and Grants Search Tool to begin research which government financial programs may help your business.

3. What information do I need to complete my loan application?

Educating yourself on the SBA loan processing and knowing what information you need for the application can save you a lot of time. Use these resources to prepare yourself when applying for an SBA loan:

For more information on SBA loans, talk to a Commercial Banker at your local Merchants Bank. We’re proud to be an SBA Preferred Lender.

Subject to credit approval. Equal Housing Lender.

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Jim Vrchota Joins Merchants Bank in Winona as a Vice President and Commercial Banker

Jim Vrchota, Vice President and Commercial Banker

Jim Vrchota, Vice President and Commercial Banker

Jim Vrchota has joined the team at Merchants Bank as Vice President and Commercial Banker, according to Randy Domeyer, Senior Vice President and Commercial Banking Department Manager

“We are excited to have Jim join our team in Winona,” Domeyer said. “His experience in business development and lending will benefit our customers and our lending team here at Merchants Bank.”

Vrchota has more than 33 years of experience in the banking industry, much of it as a Senior Lender and Market President. Most recently he served as Senior Vice President at United Prairie Bank in Spicer, Minnesota, where he worked in commercial and ag lending. Vrchota also has a great deal of experience in SBA (Small Business Administration) lending.

“I am happy to be a part of a banking organization that has such a tremendous reputation for helping its customers meet their goals,” Vrchota said. “I look forward to becoming a part of the Winona community.”

Vrchota has a long history of community involvement, especially in the areas of economic development and community service.

Liz Diggins Joins Merchants Bank in Red Wing as a Commercial Banker

Liz Diggins, Commercial Banker

Liz Diggins, Commercial Banker

Liz Diggins has joined Merchants Bank in Red Wing as a Commercial Banker, according to Brian Hokanson, Senior Vice President and Senior Lender for Merchants Bank.

Diggins is well known in the Red Wing area, spending the past 12 years working with commercial and agricultural loans and loan customers at Associated Bank in Red Wing.

“Liz is a tremendous communicator, who enjoys working with clients and helping them to achieve success,” Hokanson said. “We are fortunate she has chosen Merchants Bank, and we look forward to working with her as she utilizes her skills helping others reach their goals.”

A Red Wing native, Diggins is currently the treasurer for the United Way of Goodhue, Wabasha and Pierce Counties. She also serves as treasurer for the Wells Creek Riders Snowmobile Club.

“I am thrilled to be working with Merchants Bank because of its commitment to the community,” Diggins said. “Helping Red Wing to continue to grow is important to me, and there’s no better place to make that commitment to the future than at Merchants Bank.”

In addition to graduating from Red Wing Central High School, Diggins has an undergraduate degree in business management from the College of Saint Benedict and a graduate degree from the University of Wisconsin-River Falls.

Listening to the Customer

Merchants Bank, Business Loans

Yer Yang and William Moua, owners of Rollingstone Mini Mart.

If you were to ask William Moua and Yer Yang the secret to their success at the Rollingstone Mini Mart, they would tell you it’s been listening to their customers since they purchased the store in 2004.

The couple keeps their prices affordable. They offer hot food, convenience items, a small liquor store and fuel. They’ve been rewarded with customers who have made their store an important part of Rollingstone.

“Without this store, it would be a little harder for the people in town. We have something that they need,” Moua said. “I’d say we know 95 percent of our customers by name.”

So, when Moua’s customers told him they’d have no reason to go into Winona, if Moua and Yang would add a Laundromat, the couple decided to make the addition. The problem was, no one listened closely enough to them at first when they were looking for a loan.

Saved $8,000 in Fees

That was until they followed a recommendation from Project FINE and went to Merchants Bank and met Business Banker Greg Borcherding.

Moua had been told by a bigger bank that it would take three months just to find if he’d been approved for a loan, and up to three more months to complete the process.  Borcherding turned the loan around quickly and structured the loan in a way that saved Moua and Yang over $8,000 in fees.

Moua said he liked the way Borcherding treated them. “It’s personal with him,” Moua said. “He’s easy to work with, knowledgeable and very helpful.”

For Borcherding, the pleasure was all his. “They’re very nice people, hardworking and the place is always busy,” Borcherding said. “It’s important to the Rollingstone community.”

Moua said he wouldn’t hesitate in recommending Borcherding to other small business owners.“I’ve worked with many bankers, and Greg has been the best for me. I give him an A plus,” Moua said.

Merchants Banks offers business financing options for your specific needs. Click here to learn more.

Loans are subject to credit approval.

Kim O’Reilly Joins Merchants Bank as Vice President and Commercial Lender

KimOReillyWelcome

Kim O’Reilly has joined the Merchants Bank team as a Vice President and Commercial Lender, according to Brian Hokanson, Senior Vice President and Senior Lender for the Cannon Falls region.

A well-known banker through the region, O’Reilly will be working with customers throughout the area and will have offices in both Cannon Falls and Red Wing.

“What makes Kim an exceptional banker is her desire to understand the goals of her customers and then put together a solution that helps the customer realize those goals,” Hokanson said. “She does that for the smallest companies to the biggest with an equal amount of energy and knowledge.”

O’Reilly has been in banking for 19 years, including the past 11 at Associated Bank in Red Wing. She said she’s looking forward to being a part of the Merchants Bank team.

“Merchants has an excellent reputation because it’s committed to its customers.” O’Reilly said. “That’s important to me.  I am committed to my family, our farm, our church and our community, and my customers know that I deliver that same level of commitment to everything I do for them.”

O’Reilly lives in the Red Wing area, where she, her husband, Casey, and their three sons operate an organic dairy farm with 200 head of livestock. She is active in the community as a Red Wing Chamber Ambassador, a member of the United Way of Goodhue, Wabasha and Pierce Counties Board of Directors, and she also teaches Sunday School at the Eidsvold Lutheran Church. She has an undergraduate degree from the University of Wisconsin-River Falls and a Masters’ in Business Administration from the University of St. Thomas.

Contact Kim today: kjoreilly@merchantsbank.com or 507-263-7561.

Manage Your Business’s Money with These Helpful Tools

ModernFinancesWould you like to better manage your businesses money and make it work harder. With three areas of focus – Tools for Collection, Tools for Disbursement and Tools for Management – Merchants Bank’s Cash Management area – what some banks call Treasury Management – is worth exploring.

Learn more about Tools for Management:

Online Banking – Conveniently view account balances, check images and transactions, transfer funds between your Merchants Bank accounts, create Bill Payments and ACH transactions (subject to Agreements), submit requests for Stop Payments and more.

Positive Pay – Give yourself peace of mind. Positive Pay can help detect fraudulent checks that are being issued on your account.

ACH Blocks and Filters – Control your accounts by ensuring your business checking account isn’t used for unauthorized ACH transactions.

Financial Electronic Data Interchange (FEDI) Reporting – The computerized exchange of payments between your business, your customers and vendors ensures

For more information on Cash Management services, visit our website.

Chad Anderson Has Joined Merchants Bank as Vice President and Business Banker

Chad Anderson, Business BankerChad Anderson has joined the team at Merchants Bank as Vice President and Business Banker, according to Randy Domeyer, Senior Vice President and Business Banking Department Manager.

“We are excited Chad has decided to join our team,” Domeyer said. “He’s an experienced and knowledgeable banker who is well known and has strong relationships in our market. We are sure he will enhance what we have to offer business customers throughout the area.”

Before joining Merchants Bank, Anderson had been employed at Winona National Bank the past 12 years as a business banker. He has experience in all areas of business lending, including commercial, residential, real estate, equipment loans and SBA (Small Business Administration) lending.

“This is a good opportunity for me to build and enhance relationships in the area business community as a member of the Merchants Bank team,” Anderson said. “I look forward to contributing to the growth of the bank and representing Merchants in the community.”

Anderson is a native of the area and is active in community organizations, including currently serving on the boards of the Winona ORC and the Winona Area Chamber of Commerce.

Contact Chad for your business banking needs today: 507-457-1196 or cjanderson@merchantsbank.com.