a sba loan

Sba Loans

Executive Compilation By John Noble

Advantages of Commercial SBA Loans
Executive Summary By Mario Olivera

Some of the most reliable commercial mortgage programs offered are government sponsored. One of those reliable programs is the SBA commercial loan. Lately, SBA commercial loans have gotten a bad rap. The SBA features some exceptional advantages for many commercial borrowers would such as 90% commercial financing. SBA loans allow borrowers to use projections and help commercial applicants who have low cash flow or assets. A solution to combat this process is to apply with a commercial mortgage company which is a preferred SBA lender. It is not uncommon to wait six months for a SBA loan update when going to a commercial mortgage company which is not preferred.

For example, on the well-known SBA 7a loan program, the SBA charges a loan “guarantee fee” of 2.75% of 75% of the loan’s principal balance. In contract, most banks or mortgage companies only charge 1%.

Getting Accepted For A Small Business Loan
Executive Summary By Joseph Kenny

One of the chief reasons that small businesses fail is lack of sufficient capital.  Do you need the money to expand or are you just beginning the business? After assessing how much capital your business needs, you will decide whether you want equity or debt financing. Banks, commercial finance companies, the U.S. Small Business Administration (SBA) and savings and loan companies offer debt financing. Historically, businesses have patronized banks for financing, especially for short-term loans. Banks will often turn down small businesses requesting long-term loans because of the risks involved. When a business applies for a loan, the lenders usually ask for the borrower’s personal guarantee as well as considering the business’s equity. Most small businesses make use of equity financing. Commonly, the source of equity funding is from venture capitalists. These are institutions that risk money on small businesses, hoping for a good return for their investment. Whether you decide on equity or debt financing, you will need to present a financial picture of your business. Any person or institution lending your business money will want to know exactly how the business will use the funds.

SBA Commercial Loans – Status
Executive Summary By Jeff Rauth

Number of closed loans is also way down.  For one and this is no surprise, both the SBA 504 and the 7a are expensive compared to conventional loans. From the broker’s perspective, selling the 2.75% SBA guarantee fee on the 7a program is no easy task. And it doesn’t matter to a lot of borrowers, especially those that are use to more competitive conventional loans, that the fee is rolled into the loan amount. For example, we have several borrowers waiting that have hard money loans and would rather pay their double digit rates than refinance into an adjustable rate. Of course this assumes that conventional loans will be back.

Another issue has been that the SBA recently rewrote their 800 page manual and made it a more manageable 200 pages. This confusion and doubt has been an incentive for some banks to pass on the SBA programs. What are the liquidity issues? As many readers are aware most banks that fund SBA loans do so with the intent of selling the debt off onto the commercial secondary market. For example, try getting a car wash loan done right now without the SBA guarantee. Or a hotel loan or a restaurant loan.

Check out my other guides on The Federal Loan