7 Reasons Your Medical Practice Needs a Business Lawyer
Starting a medical practice or med spa is an expensive prospect. Even if you begin with a generous supply of capital, including your personal money, loans, and investors, you can find yourself burning through it quickly. This might make you look for places where you can potentially cut expenses at the beginning.
However, a small business lawyer is not an expense you should cut. Here are seven reasons why your investment in a business lawyer is smart for your medical practice.
Protect Personal Assets
You are ready to sacrifice a lot to make your medical practice a success, but why should you sacrifice more than you have to? A medical practice comes with numerous potential business and legal risks. These risks can become serious financial risks to you personally if you don’t take adequate steps to separate your business and personal assets.
A small business lawyer can help you with business formation documents so that the business risks don’t end up draining all your personal assets. Consulting with a lawyer can help you understand the practices that you need to use regularly to maintain separation.
Complex Laws for Medical Practices
If you are a doctor, you understand that there are many complex laws that govern the way you practice medicine. In addition to these medical practice-specific laws, there is an entirely different set of laws governing medical practices as businesses. Some of these laws are directly related to the way doctors are regulated, but others are going to look completely foreign to you as a doctor.
If you are not a doctor, there is an entirely separate set of laws governing businesses that are associated with the medical world, such as med-spas, weight loss clinics, and other businesses that provide services that require medical oversite and/or provide services that include medications that are covered under prescriptions such as weight loss injections, Botox and other cosmetic fillers, and other cosmetic procedures. Who can own the businesses associated with these services, the relationship between the owner of these businesses and the medical providers associated with them, and who among these individuals can do what are complex and regulated by multiple entities in Colorado. Failure to understand and comply with these laws can expose your business to legal risks that can stop your business before it even really has a chance to open.
Risk of Heavy Fines
The complex regulations surrounding medical practices are deemed necessary because people are putting their life – or at least their health – in the hands of your business. Because of the risks to life and limb, medical practices can be subject to heavy fines for improper business practices.
These fines are not necessarily linked directly to medical practice, either. Advertising, accounting practices, inventory, and recordkeeping errors can all be cause for major fines on your business. A business lawyer can help you understand how these laws apply to your medical practice.
Managing Intellectual Property
Although your medical practice has significant value in its location, and its medical equipment, likely the most valuable thing you work with is intellectual property. This includes your patient list, patient files, specific medical practices that you employ to help your patients, as well as the branding and marketing that goes along with them.
When you set up your medical practice, you need to establish clearly who owns any intellectual property associated with the practice. Is it yours? Does it belong to the business? Do investors have a stake and if so, are they legally allowed to? What about employees who might develop new intellectual property while they are in your employ? It’s important to answer these questions at the beginning or else you may find yourself embroiled in complicated and expensive legal battles later.
Minimize Risks from Contracts
Another potential source of future legal battles is your business contracts. If you secure investment to help start your medical practice, it’s important to have a lawyer review the paperwork to make sure the terms are reasonable and fair and that the investment does not create issues regarding who has control in a business that provides medical services. Purchasing or leasing expensive medical equipment, from cosmetic lasers to surgical robots, often comes with complex contracts. These contracts lay out everything from payment plans to advertising to liability related to medical errors while using the machine. Even a service contract for maintaining the machines is unlikely to be simple, and it’s important to understand what potential liabilities these contracts create.
A small business lawyer can look over your contracts and help you understand the terms so you know what you’re really getting into when you bring on these machines.
Disclosure and Consent Forms
Along with their potential benefits, medical procedures often come with risks. It’s important for you to disclose these risks to your patients and obtain informed consent from them prior to treatment. Failure to make adequate disclosure and obtain proper consent can expose your business (and sometimes you) to heavy legal penalties. This can include fines as well as personal injury and malpractice lawsuits.
Your disclosure and consent forms offer important protections against fines and lawsuits. A small business lawyer can help you make forms that provide the protection you and your business need.
Employee Relations and Risks
Like every business, your medical practice will hire employees and must be prepared for employment law challenges. You need to understand the potential legal pitfalls of hiring employees and managing relationships with them.
In addition, medical employees come with an entirely separate set of legal concerns. You need to make sure your employees understand and comply with HIPAA and other information regulations. You must determine how to handle intellectual property and trade secrets. It’s also important to manage liability related to medical procedures performed by employees, including how to manage malpractice insurance at the business.
A business lawyer can help you manage these and many other complexities of employment law for medical practices in Colorado.
Legal Help for Your Medical Practice
Since 2010, Elizabeth Lewis has been helping small businesses of all types in Denver, including medical practices, to navigate the complex legal environment. She is focused on the needs of small businesses, including the challenges of start-ups. She has helped many medical practices and med spas navigate early challenges from hiring their first employee to protecting their intellectual property against piracy, including piracy by large, powerful corporations.
Elizabeth believes in forging deep, strong ties with her clients. She knows that you need a business lawyer you can trust, and she does everything possible to earn and maintain your trust. These deep ties also help her make customized legal recommendations that are specifically tailored to each client’s needs.
These specific recommendations are part of Elizabeth’s practical, results-oriented approach. She has helped many clients grow from tiny startups to large businesses. Once she understands your goals, she will help you do what you need to achieve those goals.
To learn how the Law Office of E. C. Lewis can help your medical practice navigate the complexities of business law, please contact us today.
Common Legal Issues Impacting Accountants, Insurance Agents and Financial Advisors
It’s easy for specialists to get lost in their area of focus. Your specialty can look like the entire world, especially once you have your own business and let yourself focus on the things that you really love.
However, this is a peril, because everyone, no matter their specialty, exists in a complex, legal environment. This legal environment can have profound impacts on your business or your life, especially if you neglect it. Accountants, insurance agents, and financial advisors are no exception to this risk. Here are some of the legal issues that you can more easily navigate with the help of a small business lawyer.
Accountants
Accountants are trusted with their clients’ money. There is nothing more dear to many Americans’ hearts than their money, and this means that these interactions can be fraught with tension and suspicion. Accountants have to take steps from the beginning to ensure that everything they do will hold up under legal scrutiny or else they can find themselves in serious legal trouble.
Accusations of Fraud or Negligence
One of the biggest potential legal dangers for an accountant is an accusation of fraud or negligence. These accusations can be expensive to defend against and can lead to serious penalties and even jail time if you’re not prepared for them.
Prepare yourself for these potential accusations by making sure you understand what actions could potentially be considered fraud or negligence. Set up standard operating procedures that help you avoid any misdeed or even the appearance of misdeeds.
In addition, it’s important to make sure that you have sufficient safeguards in place to protect your private property from professional liabilities. Strong business formation documents are a great start. They can ensure your personal property is safe from professional errors or missteps.
Contracts
Contracts are another important safeguard. These can put legal barriers in place that can defend you from frivolous and unfounded accusations. Laying out a grievance procedure in your contract can help you avoid the uncertainty of the courts. It can also limit damages and give you more time to properly respond to these allegations.
Insurance Agents
Insurance agents work as complicated intermediaries between massive corporations focused on profit and individuals who entrust their dreams to these corporations for protection. The situation often works out to the satisfaction of all, but sometimes things go expensively awry. When that happens, insurance agents can be attacked from one or both sides.
Because of this exposure to liability from both sides, it’s important that insurance agents take steps to protect themselves and their assets from professional problems. This includes structuring the company properly to avoid exposing personal assets to professional liabilities.
Misrepresenting Coverage to Insured
Insurance policies are complicated, and it’s often necessary to simplify terms in order to explain them to potential purchasers. However, sometimes that simplification causes people to feel that they were deceived in the sales process.
Because insurance agents are also acting as salespeople, there might be accusations that the misrepresentation was deliberate and made for profit.
Failure in Duty to the Insurer
Insurance agents also have a responsibility to the insurer that they represent. Failure to live up to those responsibilities can expose an insurance agent to significant liabilities. Sometimes, failure is simply making a mistake. Other times, it might be a failure to properly follow company instructions or even exceeding the express or implied authority granted by the insurance company.
In these cases, the insurance company stands to lose significant money, and they will seek to recoup it from your small business as an insurance agent.
Financial Advisors
Financial advisors are in a uniquely precarious position. Not only are people or businesses trusting them with their money, but financial advisors are also giving recommendations in the highly uncertain world of finance. Trying to maximize returns and/or protect wealth can sometimes equate to educated gambling. In a turbulent market, even the best bets can crap out. When that happens, people can turn their bitterness on their financial advisor with various accusations of misconduct and attempts to recoup their losses.
For this reason, it’s important for financial advisors to take key steps to protect themselves from their clients and the law. Proper structuring of your financial advisor business can insulate your personal assets from business liability. In addition, strong contracts can clearly define expectations and responsibilities, providing an additional layer of protection for your business and personal assets.
Disclosing Secrets
Financial advisors are in a position of trust. Whether you’re advising an individual or a company, you will have access to secret information that you are supposed to keep confidential. Confidentiality agreements are common, and you should have your own lawyer look these over before you sign them.
In addition, you should make sure your own contracts have the best protections for you and your business against accusations of disclosing secrets. Plus, as always, protect your personal property from business liabilities.
Personal Profiteering
Being in a position of trust and recommending people make certain financial moves can give you the opportunity to make a profit of your own based on other people’s actions. This could be encouraging people to make financial moves (or making these moves for them) in ways that profit you. Or it could be combining your money with clients’ funds in ways that reduce your costs and improve your profits. Perhaps you might even be accused of embezzlement.
You need to be prepared for these accusations even if your operations are completely above board. Strong contracts, defensive company structure, and, of course, clear knowledge of the law will all minimize your risks.
Breach of Fiduciary Duty
As a financial advisor, your duty is to always act in your clients’ best interests. Even when you do this, you might be accused of not living up to this responsibility, especially when the market takes an unexpected turn.
Make sure you understand your duty and know how to avoid even the appearance of impropriety. Spell out expectations and responsibilities in your contract to make it clear what you will and won’t do and always protect your personal property.
Help for Small Businesses in Denver
One of the benefits of being a professional like an accountant, insurance agent, or financial advisor is that you can strike out on your own to increase both your freedom and income. However, when you are on your own, you also bear all the potential risk from legal hazards associated with your profession. Even if you think you understand these hazards, getting advice from a legal professional is smart.
Since 2010, Elizabeth Lewis has been helping small businesses in Denver and along the Front Range with a wide range of legal matters. She is focused on building strong relationships with her clients so that she can understand their needs and make specific recommendations for their profitability and growth. She has always been dedicated to providing expert legal counsel to small businesses. That experience has allowed her to understand what legal strategies work best for small businesses facing legal challenges. Her results-oriented approach means that she always offers practical advice for your business based on your specific industry and stage of growth.
To learn how Elizabeth can provide legal help to you as an accountant, insurance agent, or financial advisor, please contact the Law Office of E. C. Lewis for a consultation.
As we approach the end of the first quarter of 2025, we can see many major trends shaping up that will significantly impact small businesses in the coming year and beyond. Here are some of the biggest trends that will affect small businesses in 2025.
E-Commerce
By now, every business should know about the importance of e-commerce in the modern marketplace. However, it’s still worth mentioning that this aspect is critical for any small retail business that wants to succeed in 2025. E-commerce currently accounts for 20% of all retail sales and is likely to grow significantly in the coming years, representing a full quarter of all retail sales by 2030.
Every small business selling merchandise should have an e-commerce component to their business. This doesn’t have to be a big investment. For many businesses, something as simple as an eBay or Amazon shop is enough of an e-commerce presence. However, there are many e-commerce platforms available that make it not much harder to open your own digital storefront, which can be more profitable. Sellers’ fees on the big platforms can range from as little as 8% to 45% or more. In contrast, the popular e-commerce platform Shopify charges $29 per month, plus credit card and third-party payment provider fees for its basic plan. Take the time to calculate the relative costs and benefits of having your own website versus having a seller page on one or more of the big marketplaces.
Online Marketing
If you are trying to make sales online, you will also need to be marketing online. Businesses that aren’t marketing online risk losing more than just online sales, though: failure to market your business online can mean that your business won’t show up when people try to use their phones to find nearby shops. The minimum digital marketing each small business must do is to claim and maintain their listings on the major search engines.
However, if your business wants to profit from e-commerce, it’s important to pursue a multifaceted online marketing approach. This marketing approach should include:
Search engine optimization (SEO)
Pay-per-click (PPC)
Social media marketing
Content marketing
Your online marketing should also be what is described as a full-funnel approach, targeting potential and actual customers at each stage of the decision process from basic awareness through decision-making and to repeat business.
Cybersecurity
Cybersecurity is essential for all businesses.
For e-commerce operations, cybersecurity should be incorporated from the very beginning. Whether you have a shopfront in a big marketplace or set up your own storefront with a major e-commerce platform, you should have enough cybersecurity built in to protect your small business from related lawsuits. However, if you are building your own e-commerce platform, you must take care to build adequate safeguards.
But cybersecurity is important for more than just e-commerce businesses. Any small business that collects credit card payments and retains any amount of customer information is a desirable target for hackers. Even if you don’t have a lot of information to steal, you might still be a victim of a ransomware attack that can hold your business hostage.
Remember: cybersecurity is about more than just technical security features. It’s important to train yourself and all your employees to identify and avoid common socially engineered cyber-attacks.
Tariffs
If your business imports merchandise or materials, tariffs are likely to have a big impact on your profit margins. With proposed tariffs of up to 50% on some items from our largest trading partners, you are likely to see increased costs. Even if you don’t import items directly, you might see increased costs because your domestic trading partners are seeing their costs go up.
You will have to decide how much of this cost to pass on to your customers and how much you can afford to absorb.
On the other hand, some businesses may benefit from tariffs, making it easier to recoup the costs of running a small operation.
Business Uncertainty
However, if you’ve been paying attention to the news about tariffs, you’ve noticed that the administration has given mixed messaging about the timing, focus, and size of tariffs. Tariffs were supposed to start immediately, then were postponed, then were on again, then off again. Right now, it’s unclear when and how the tariffs will affect the market.
This uncertainty can make it hard for your business to make its plans for the upcoming year. Should you contract with a foreign supplier and hope for the best? Would it be better to work with a more expensive domestic supplier? Would other disruptions in the US economy make that domestic supplier an unreliable partner?
This uncertainty won’t just be affecting you, but it will impact the entire business environment around you. There is already evidence that consumer confidence is falling, which could significantly impact your revenue, but how is this a temporary situation or likely to become a more permanent condition?
Fewer Grants and Loans
Another difficult situation for many small businesses is that they may find it harder to get grants and loans from the Small Business Association (SBA) under the new administration. Funding cuts have been announced which may impact all small businesses. In addition, these funding cuts may impact small businesses owned by women and minorities more as there have historically been more funds available to these businesses than other businesses.
However, the SBA is touting an expansion of the 504 loan program to make it easier to access capital loans for manufacturing.
In Denver and several other cities, access to SBA support is further complicated by the removal of local offices.
Changing Regulatory Environment
Some small businesses may see relief in reduced regulations this year, which could diminish their costs and make it easier for businesses to enter industries where regulations had previously led to uncertainty or liability exposure.
To promote the removal of regulations, the SBA has announced a Red Tape Hotline, where businesses can call to report regulations that represent an undue burden.
Get Legal Help for Changing Times
When it comes to navigating the challenges of the modern marketplace, a small business lawyer can be a tremendous help. With years of experience and experience with many clients across the board, a small business attorney is in a great position to identify both challenges and opportunities for your business to help you make the most of each.
Since 2010, the Law Office of E. C. Lewis has been helping small businesses to prosper no matter the conditions. Elizabeth Lewis strives to develop long-term relationships with her clients. This means that she will be there whenever you need her help in dealing with the newest trends affecting your small business. She has worked for years with many small businesses, and she knows the challenges you’re facing and how other businesses have successfully navigated them. She believes in doing what it takes to help your business prosper and will customize her legal services to ensure you are getting what your business needs to navigate changing conditions.
To learn how Elizabeth can help your small business in 2025, please contact the Law Office of E. C. Lewis today.
Most Profitable Industries for a Small Business Startup in 2025
Some people start a small business because they have a passion for the work. These people know what kind of business they want to start. Others, though, are primarily considering the profitability of their potential business. If you are focused on the profitability of your small business, it makes sense to choose an industry that offers a strong potential for profit.
Here are some of the industries that offer a high potential return for small business startups in 2025.
Care for Seniors
It’s no secret that the population is aging, and that Boomers represent a large potential market for businesses. Boomers have accumulated about half of all the household wealth in the US. They’re the last generation to have benefited significantly from pensions, and they have Social Security payments (at least for now) to help them meet expenses. Plus, surveys show that Boomers aren’t trying to save their money for their children. They want to spend it.
This means that there are many opportunities to offer senior care. The level of services can vary depending on your focus. The easiest level of care to offer is basic home assistance, including things like housework, yard work, and basic handyman services. Some seniors are even looking for companionship. The capital requirements for this type of business are small, and it’s easy to enter, which does mean that there is a lot of competition.
You can offer a more exclusive tier of services that includes medical services, such as nursing care, physical therapy, and other types of care offered in your clients’ homes. This upper level of care requires more licensing, and you must hire more expensive personnel, which makes it harder to get into. However, with less competition and the ability to charge at a higher price point, this can become an even more profitable company.
Business Consulting
Large corporations are posting record profits. After stock buybacks, they are sinking their profits into measures aimed at improving their competitiveness, which includes hiring consultants to improve many aspects of their business. On average, a business consultant makes over $200,000 per year.
Although being a consultant may require significant expenses in terms of travel and marketing, the revenue potential still makes this a potentially very lucrative business.
Software Development
The software industry is one of the most profitable in the world. Although the industry is dominated by huge corporations, there is still a lot of room for small businesses to make an outsized impact – and profit!
These days, everyone depends on software to do any type of work. Retail, manufacturing, construction, and healthcare are just a few of the industries that have come to rely on software packages designed for their needs. Although virtually every industry is served by some type of software, it’s possible for small developers to make a huge profit by either identifying an unserved community or writing a new software package that provides better service than the currently popular package.
Software development also offers an appealing feature for many people starting a small business: the possibility of a huge buy-out as the company gets successful. This allows a business owner the opportunity to either move to a new business or simply retire on the proceeds of their sale.
AI Integration
In recent years, AI has flexed its capabilities in a very public way. However, as impressive as AI’s feats can be, it isn’t always clear how the technology can offer business benefits.
This is where AI integration comes in. A person with a good knowledge of AI’s potential and limitations can help businesses understand how they can deploy the technology in their industry. The successful integration of AI into a business can be very lucrative for a company, so they are willing to pay a lot to businesses that can help them. As AI has virtually limitless use cases, and the suitability of these cases continues to change with the advancing technology, AI integration consultants will likely have a lot of profitable business for years to come.
Digital Marketing
Almost every business relies on marketing to be successful in a crowded and competitive marketplace. Online marketing is increasingly becoming the way that companies reach their customers, and this sector is expected to see robust growth for the foreseeable future.
Successful digital marketing companies are increasingly specialized, focused either on a particular industry (such as personal injury lawyers) where they can leverage their expertise of the market, or on a particular technique (such as social media marketing) where they can leverage their technical expertise.
Pet Services
Pet ownership has surged in recent years. In many households, pets are spoiled children (whether or not the household has actual children), which means that people invest considerable money in their pets, opening the potential for numerous profitable pet services companies in virtually any state in the US.
Pet services can take many forms, from a simple dog walker to pet grooming to obedience training to having a pet store. Many of these potential services can be light and lean, but others require significant investment in training, personnel, and equipment.
Real Estate
Real estate values keep going up, outpacing inflation even in recent years. Since real estate agents are paid as a percentage of the value of properties they sell, this means that their income is going up, too, and outpacing inflation, something not all industries can claim.
Real estate agents typically require licensing, which is a significant up-front investment in time and money. There is also a fair amount of networking and other marketing required. Otherwise, though, there aren’t a lot of initial investments necessary to start a real estate business.
In addition to working as a real estate agent, there are many real estate adjacent businesses that can be profitable including:
Home inspections
Flipper
Vacation rentals
Home improvement
All these businesses can take advantage of the rising value of real estate to be profitable.
Help with Your small Business
If you are considering starting a small business in the Denver area, a small business startup attorney can help you set yourself up for success. Avoiding common legal problems and lawsuits, securing intellectual property, and protecting your personal property from business risk, there are many ways that a small business lawyer can help you in starting a business.
If you are looking for a small business attorney in Denver, the Law Office of E. C. Lewis can provide the guidance necessary to ensure you set your business up properly and protect your rights moving forward. Elizabeth Lewis has been helping small business owners find success in the Denver area since 2010. She is dedicated to building long-lasting relationships with her clients. She has seen many of these clients go from tiny start-ups to large, powerful, and profitable businesses. She can help you figure out how to make your small business dreams a reality.
Elizabeth understands that the needs of a small business are different, and she has dedicated herself to meeting these needs with a result-oriented approach that customizes her legal services directly to your needs.
Please contact the Law Office of E. C. Lewis today to learn how she can help your business become profitable.
Small businesses are the engine of the US economy. They provide a significant amount of employment, provide vital services in their communities, and develop important innovations. However, finding the funding to start and run a small business is not always easy.
Since it was established in 1953, the Small Business Administration (SBA) has been facilitating loans to small businesses that would otherwise not find suitable funding. However, the process of applying for 7(a) loans (named for the section of the Small Business Act that authorized them) can be complicated. Here are the steps to go through to apply for a 7(a) loan.
Is Your Business Eligible?
There are many basic requirements your business must meet to be eligible for an SBA 7(a) loan. Some of them are fairly straightforward. The basic ones are:
Be an operating business
Operate for profit
Be located in the US
If you meet those requirements, you can dive into the more complicated aspects of qualifying for 7(a) loans.
Is Your Business Small Enough?
What counts as a small business from the SBA perspective? This is defined according to the type of business that you are and can be quite variable. Some industries have their size defined by the number of employees, while others have their size defined by the value of the business. For example, soybean farming businesses are considered small if they are less than $2.25 million in value, but a new single-family housing construction business is considered small if it is worth less than $45 million. Furniture wholesalers are considered small if they have fewer than 100 employees, but iron mining companies are considered small until they have 1400 employees. You can see the size requirements by industry here.
Note that size standards include your business and its affiliates.
Is Your Business of an Eligible Type?
There are some types of business that aren’t eligible for 7(a) loans. In addition to non-profits, businesses are ineligible if they are:
Financial institutions that lend money
Passive businesses that don’t use or occupy the assets they buy or improve
Life insurance companies
Pyramid sales companies
Casinos and other businesses that get more than 1/3 of their income from gambling
Illegal businesses, including marijuana operations that are legal in Colorado
Private clubs with exclusive memberships
Government-owned businesses (except those owned by Native American tribes)
Loan packagers that significantly package SBA loans
Businesses with an associate guilty of financial misconduct or lying
Businesses that perform live performances of a sexual nature
Selling products or services of a sexual nature
Political lobbyists or lobbying firms
Speculative businesses
Businesses that have defaulted on a previous SBA loan
In the last case, a small business can get a loan if the SBA waives the default for good cause.
Have You Tried Other Lenders?
The SBA sees 7(a) loans as a resource of last resort. You should only go to them after you have tried (and failed) to get funding from other sources.
Be Creditworthy and Capable of Repaying the Loan
Being creditworthy can mean several different things when it comes to a 7(a) loan. It could mean that you have an appropriate FICO score. Other times, you might have to provide sufficient collateral. In still other cases, you might just need to have a solid business plan. It depends on the type and the size of the loan.
The same is true of demonstrating that you will be able to repay the loan. Lenders will often want to see certain types of proof that you are going to be able to generate revenue to repay the loan. Having a solid business plan, good market research, contracts, a list of preorders, potentially even social media exposure might be enough, depending on the nature of the loan and its size.
For this eligibility requirement, it can really help to get the advice of someone who has gone through the process before and will know what’s likely to work in your case.
Is the Use Eligible for a Loan?
Just as the SBA only backs loans for certain types of businesses, it also only backs loans for certain types of uses. However, the list of use cases is relatively straightforward, compared to the types of eligible businesses.
You can use your 7(a) loan for:
Real estate and buildings, including purchases, refinancing, or renovating
Working capital, over both the short- and long-term
Refinancing current business debt
Machinery and equipment
Supplies, furniture, and fixtures
Buying a business
A combination of any of the above
Some types of 7(a) loans also allow a line of revolving credit, usable over a period of up to seven years.
Find a Lender
The SBA doesn’t issue loans directly. Instead, the SBA supports loans by lending institutions. However, you will use the SBA’s Lender Match tool to connect with one or more potential lenders.
Before you start, you should assemble all the details that explain the information we’ve discussed above, including:
Evidence of the credit history of you and/or your business
Financial projections
Collateral
Industry experience or anything else that contributes to your likelihood of repaying the loan
Then you’ll be asked a few general questions about your business and the loan. After that, the Lender Match will (probably) link you with one or more lenders who might be willing to provide your loan.
Compare the terms you’re offered and decide which lender is right for you. Although 7(a) lenders have a maximum interest rate that they can charge, they won’t all offer you the same terms. In addition to different rates, some might pay fees related to the loan while others will pass them on to you. They might offer different repayment periods. You will be able to communicate with lenders and potentially bargain.
Submit Your Application
Now it’s time to complete your application. This is where you’ll need to provide all the detailed information you discussed with your lender, including supporting documentation. Then you just have to wait for a final decision.
With a 7(a) loan, the decision could be completed in under two days, but it might take up to ten business days.
Get Help with Your Application
If this is the first you’ve ever applied for a 7(a) loan (or possibly any loan at all!), the process can seem daunting. Mistakes can cost you your funding. With up to $5 million on the line, it makes sense to consult with someone who has done this before and has critical knowledge that can improve your chances of getting the funding your business needs.
Elizabeth Lewis is a Denver small business lawyer who has helped dozens of small businesses go successfully through the complicated process of applying for a 7(a) loan. She is prepared to use her expertise to help you assemble a winning loan application. This can include taking steps like finding the right structure for your small business, writing an effective business plan, communicating your relevant expertise, setting up a spending plan, and making financial projections.
Since 2010, Elizabeth has been helping small businesses in the Denver area. Whether you’re a startup out of your basement or a 100-person factory operation, she is prepared to help you. Her expertise is in small business law, and she has helped many small businesses navigate the challenges of early growth. She is dedicated to providing long-term help for you by building a relationship based on mutual trust. Her results-oriented approach can help you focus on what matters for your business’ success.
To learn how Elizabeth can help your business, please schedule an appointment at the Law Office of E. C. Lewis.
One of the most important steps in starting your small business is securing capital to finance your initial outlays for your location, stock, fixtures, equipment, and more. Starting capital can also cover operating expenses during the early period while you are working to improve your income.
The Small Business Administration (SBA) offers many loans to help businesses get off the ground. However, the different types of loans are designed for specific circumstances, and it’s important to know which type fits your situation. Failing to understand what type of SBA loan is best for your business can mean either getting into legal trouble by using loan funds improperly or missing out on favorable terms. This brief guide can help you understand the complexities of SBA loans, though it’s recommended that you consult someone, such as a small business lawyer, before applying for an SBA loan.
How to Qualify for SBA Loans
The SBA loan program has several requirements you must meet to qualify for lending. When talking to a lender, they may reveal more specific requirements, but in general terms, your business must:
Be for-profit
Be physically located in the US
Do business in the US
Have sound credit
Have exhausted other financing options
If you meet these requirements, you might be able to get an SBA loan.
7(a) Loans
Most SBA loans fall under the 7(a) loan program. These loans can be used for a variety of purposes, including:
7(a) loans take their name from the fact that they are authorized by Article 7(a) of the Small Business Act of 1953. Below are the types of 7(a) loans available.
Standard Loan
Standard SBA loans are for an amount from $500,000 to $5 million that don’t fit other SBA loan types. The SBA can guarantee up to 75% of the loan amount, and the loan can be approved by an SBA-approved lender within 5-10 business days. You will negotiate the interest rate with the actual lender, but it cannot be higher than the SBA approved maximum. Collateral requirements depend on the amount being financed, but it may include personal property as well as that owned by the business.
The standard SBA loan doesn’t allow for revolving credit, though there are several types of loans within the SBA system that do.
Small Loan
The SBA’s small loan program allows expedited approval, lax terms, and greater guarantees for smaller loans. SBA small loans can be approved in as few as two days. The maximum amount for a small SBA loan is $500,000. The SBA can guarantee up to 85% of the loan amount for loans up to $150,000, but for larger amounts, the guarantee is only the same as the standard loan.
Rates are negotiated between your business and the lander, not to exceed the SBA maximum. No collateral is required for loans of $50,000 or less. For larger amounts, you will negotiate collateral requirements with the lender, but your loan cannot be turned down just because you lack collateral.
Express Loan
As the name implies, SBA express loans are quick. They can be approved in as little as 36 hours. However, these loans can only be up to $500,000 and the SBA only guarantees up to 50% of the loan amount.
However, the Express loan does allow for revolving lines of credit for up to 10 years.
CAPLines Loan
CAPLines loans are a group of loans intended to help businesses meet short-term and cyclical capital needs. This can include loans focused on seasonal needs or needs related to construction or rehabilitation of buildings for resale. These loans have a maximum duration of 10 years.
Export Working Capital Program (EWCP) Loan
These loans are designed to help businesses that can potentially generate export sales but need additional capital to achieve this goal. The loans can be for up to $5 million and may be up to 90% guaranteed. Businesses can also get assistance from local US Export Assistance Centers.
EWCP loans can include lines of revolving credit for up to 36 months.
Export Express Loan
The Export Express Loan Program is intended for loans supporting exports that are smaller than the EWCP loans. Export Express Program loans can’t exceed $500,000. These loans can be up to 90% guaranteed if for $350,000 or less, and no collateral is required for loans up to $50,000
These loans can include revolving lines of credit for up to seven years.
International Trade
These loans are intended to help current exporters improve their competitive position, or to develop new export markets. These loans can be used to acquire, construct, renovate, modernize, or expand facilities and equipment at their US facilities. They can also use it to help them develop and penetrate foreign markets. They can even use the loan as working capital for export transactions.
These loans can be up to $5 million and can be up to 90% guaranteed by the SBA.
504 Loan
504 loans are different from the other types of SBA loans because they aren’t authorized under the same provision as 7(a) loans. They are also focused on different types of investments, so they aren’t as flexible.
The 504 loan program provides long-term, fixed-rate financing for major fixed assets. The intent is to support business growth and job creation.
To qualify, your business must meet all SBA loan requirements. Plus, the business must have a tangible net worth of less than $20 million and an average net income of less than $6.5 million.
Need Help Applying for an SBA Loan?
As with anything related to the government, there is a significant amount of complexity in terms of paperwork and legal requirements when applying for an SBA loan. A small business lawyer can provide valuable assistance during the application process.
Elizabeth Lewis is a small business lawyer who has been helping businesses in the Denver area since 2010. She is dedicated to helping businesses succeed, and she can provide assistance with many aspects of qualifying your business for an ABA loan, including:
Elizabeth’s results-oriented approach helps you cut through the complexities to focus on the essential aspects of applying for an SBA loan. She has done this for many businesses and knows what makes a winning strategy.
To get help completing your SBA loan application, please contact the Law Office of E. C. Lewis in Denver.
