SBA Loans

The Small Business Administration makes loans available through participating lenders to eligible small businesses on favorable terms and for a wide variety of business needs. SBA loans have several significant advantages over traditional commercial loans. They allow longer loan terms, up to 25 years, and are fully amortizing with no balloon payments. SBA allows loan amounts up to 90% of the value of the collateral real estate, with lesser loan-to-value ratios on equipment and business acquisition. This feature often allows borrowers with limited resources to qualify for financing that is just not available from any other source. A single SBA loan can also be used to fund the acquisition of property, business and inventory, and can also provide working capital.

SBA loans can be used for a variety of business purposes. These include:

• Purchase, construction, or refinance of commercial real estate
• Business acquisition
• Business expansion
• Leasehold improvements
• Purchase of equipment, furniture and fixtures
• Start-ups of medical practices and franchises
• Working capital, usually in conjunction with one of the above

SBA 7(a) loans range in size from $75,000 to $2,000,000, while the SBA 504 program is for larger projects, with loan amounts up to $5,000,000.

Guidelines

SBA loans require that all borrowers have satisfactory credit histories. Business financial performace must be fully documented, and historical cash flow must be sufficient to cover the proposed debt. The business must occupy 51% or more of the collateral real estate, and borrowers must be actively involved in the operation of the business.

We have facilitated a large number of SBA-guaranteed loans, and have become expert at navigating the intricacies of the loan process. Our knowledge of the SBA loan process and guidelines allows us to address potential stumbling blocks early in the process, greatly increasing the probability of success. A major part of our service is to perform a detailed analysis of financial statements and other business data to determine upfront whether a proposed transaction can be successfully completed, and if not what adjustments can reasonably be made. This consultation service has resulted in a number of successful transactions that might otherwise have failed.