SBA Loans
What are SBA Loans?
SBA loans are loans made by the bank to eligible business,
which is 50% to 85% guaranteed (maximum loan amount of $2,000,000) by the full
faith and credit of the U.S Federal Government.
7a loans: Business &
Property, up to $2,000,000
504: Real estate loans (Buyer 10%, CDC 40%, and Bank 50%)
SBA Express Lines: Loans up to $200,000
SBA Forms
Who is Eligible for an SBA loan?
Virtually, all small businesses are
eligible for an SBA loan based on the U.S. Small
Business Administration's guidelines such as type of
business, proposed used of funds, and size of
business.
What are some of the benefits for the customer?
The customer benefits from longer terms, larger loan amount, and lower capital
injection requirements than conventional financing. The
customer is also able to obtain financing, which normally may
not be approved under conventional financing guidelines
(i.e. tighter cash flows, start-up businesses, lack of
collateral)
What are benefits of an SBA loan versus a Conventional loan?
- Lower debt coverage requirement on the business
- Lower debt to income requirement of the
individuals and guarantors
- Weaker secondary source of repayment is permitted
- Lower monthly payments with longer terms
- Lower capital injection requirements for business
or real estate purchases
- Loans to businesses with no or short history
- Fully amortized loans without the need to renew
and incur costs every 5 years
Other SBA Requirements?
- Tax Returns - Verification forms(4506) must be
signed by parties in the transaction
- Legal Residency - INS verification (G845) must be
signed by alien residents
- Fire Insurance - Personal property & building
- Cash Injection Verification
- Lease (Terms must equal Term of Loan)
- Guaranty Loan fee payable to the U.S. SBA (Amount
depends upon the actual loan amount)
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