SBA Loans can be used to:

  • Refinance existing debt, refinance a balloon note or set up a line of credit to reduce monthly debt service
  • Finance the purchase of commercial real estate
  • Expand or purchase a business, with or without real estate
  • Build and outfit a new location
  • Any combination of the above

Parameters of an SBA Loan:

  • Express loan up to $350K
  • 7A Loan minimum $5MM
  • 0% - 20% cash injection needed depending upon the project
  • 1:1 collateral coverage (real estate; cash value of life insurance; stocks, bonds and mutual funds.) This depends on the deal
  • Start-ups and turnaround situations need to fully secured
  • Existing businesses with decent cash flow coverage will not need to be fully secured

Benefits of an SBA Loan:

  • Terms up to 25 years
  • No financial covenants
  • Can include closing costs in the loan
  • Can include working capital and inventory in the loan
  • No pre-payment penalty after the first 3 years on loans of 15 years or more
  • Rates starting at 6% (based on prime rate)