SBA recently approved acquisition of license from American Business Lending, Inc.
Fountainhead Commercial Capital today announced the non-bank finance company will begin offering U.S. Small Business Administration (SBA) 7(a) Program loans to small businesses throughout the United States. Fountainhead’s acquisition of a Small Business Lending Company (SBLC) 7(a) Loan Program license from American Business Lending, Inc. recently received final approval from SBA. Only fourteen of these licenses were created by SBA beginning in the mid-1970s, and Fountainhead holds one of the few in the Southeast.
Best known for leadership in the SBA 504 Loan Program, Fountainhead will now expand its mandate and offer loans to small business owners for working capital, business acquisitions, partner buyouts, equipment, furniture and fixtures, startup capital, and debt refinancing, among other business purposes.
“After years of championing the SBA 504 loan program, we are pleased to expand our financing influence by acquiring an SBLC license for the 7(a) Loan Program,” said Chris Hurn, CEO of Fountainhead. “We view this acquisition as a natural evolution for our company and will offer tremendous benefits for the entrepreneurs and ‘Main Street’ businesses that we serve.”
With the acquisition of this license through its affiliate Fountainhead SBF, LLC, the company will offer SBA 7(a) loans from $200,000 to $5 million nationwide. An SBA 7(a) loan is a general-purpose loan backed by SBA for up to 85% of the loan’s value. The SBA does not lend directly to small businesses as banks and other commercial lenders provide funding for these loans, while SBA guarantees a portion of the loan. SBA 7(a) loan terms are typically longer than conventional bank financing, require less equity injections (down payments), and are more flexible with fewer loan covenants. The 7(a) Program is widely regarded as the SBA’s flagship lending program and funded more than $25 billionof loans during the last fiscal year.