SBA Loans

SBA 504

This is a fixed rate, long term program small businesses can use to purchase fixed assets, including land and

improvements, new facilities, existing buildings, machinery and equipment. The 504 Program cannot be used for working capital, investment property, speculation, inventory, consolidating or repaying debt, or refinancing.

SBA 504 Parameters

Your business must also fall within the size standard set by the SBA..Your business is considered small if it does not have a tangible net worth in excess of $6 million and does not have a average net income in excess of $2 million after taxes for the preceding two years. Generally, the project assets being financed are used as collateral. Personal guaranties of the principal owners are also required.

$100,000 to $8 million

Purchase to Maximum 90% LTV

Owner Occupied (50%+), Owner User Properties

Real Estate deals - up to 25 years

Heavy Equipment -10 - 20 years

Low interest rate

Required Documents

Executive Summary

Commerical Loan Application

3 years business tax returns

3 years personal tax returns on all principals

Signed Current YTD Operating Statement
Color photos of the property.
Explanation of any derogatoriness regarding Credit

SBA 7(a)

Finances land and building, renovations and new construction, working capital, machinery and equipment,

furniture and fixtures, leasehold improvements and debt refinancing.

SBA 7 Parameters

$100,000-$2 million

Repayment terms on the SBA 7(a) loan program is usually up to 25 years for real estate, the purchase of large machinery / equipment (fixed assets) and 5 to 10 years for working capital.

The interest rate is generally between prime+1% to prime+ 2.75%.

Interest rates can be variable or fixed (varies by lender).

The SBA also charges the lenders a fee for the guarantee.

Lenders like to see fixed assets (equipment, machinery, real estate) as collateral. They will usually ask for personal guarantees from the principals of the loan and may place liens on personal property & assets.