Minnesota SBA chief: Have a plan when applying for a government loan


Brian McDonald worked at the Small Business Administration headquarters in Washington, D.C., before joining the Minneapolis District Office in 2017 and being named District Manager in May 2020.

“Our team is very mission-driven, and it’s a big mission,” McDonald said. “By meeting directly with small business owners and seeing the impact they are having, they really keep our communities livable and vibrant; they make up 50% of the workforce.”

In an interview, he offered some ideas for entrepreneurs looking for SBA loans. Some excerpts:

Q: What is your message to business owners who are unfamiliar with SBA loans?

Mcdonalds: SBA loan programs are great programs, and worth considering as an option. The sweet spot for an SBA loan, in general, is for businesses that lack collateral and might otherwise not qualify for a traditional loan. There are competitive conditions. The SBA sets maximum interest rates for lenders, and then the interest rate borrowers get is specific to the lender they go to. For veteran borrowers, there is an additional fee waiver.

Q: How does a business apply for an SBA loan?

Mcdonalds: They would go to an SBA lender. We have a listing on our Minnesota District page. Another option would be to go to “lender match” on sba.gov. One of the first questions we ask a small business is whether it has a banking relationship. This is usually a good place to start keeping things less complicated.

Q: What are the tips for applying?

Mcdonalds: The best thing to consider would be to approach one of our Resource Partners, a Small Business Development Centre, Score or a Women’s Business Centre. We have training that we do for small businesses. We have a schedule on our website sba.gov/mn. To keep borrowers safe and protected from predatory lending, some of the warning signs are: lenders imposing unfair or abusive terms through deception, interest rates significantly higher than competitor rates, or higher fees at 5% of the value of the loan. Make sure the lender discloses annual percentage rates and full payment schedule. A lender should never ask a company to lie on their documents or leave signature boxes blank. Don’t force yourself to take out a loan.

Q: What is a common misstep to avoid?

Mcdonalds: Having an incomplete or non-existent business plan. Being able to tell the story to a lender is critical as a business owner. Having a business plan in order is really the best tool, and investing in the relationship with the lender because business loans are really different from other products.


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