SBA & USDA

Howard Francis (650) 449-6888 Howard@CPAddc.com

CPA & Attorney Due Diligence community Vetting Cost savings solutions

SBA's most Popular Loan 7(A)

SBA 7(A) Loan

The SBA 7(a) loan is the most common SBA loan product, offering flexibility on terms and business uses- SBA loans allow businesses to obtain capital with less equity than a conventional loan

Our SBA lenders have Preferred Lender Status (PLP) with the SBA which gives them authority to make final credit decisions without having to get SBA approval.
With our dedication to efficiency, collaboration and deep knowledge of small business lending. we'll take you where you need to go. Our experienced team will create a unique financing plan to help you and your business thrive.

Advantages

Up to 90% bank financing
Minimal collateral requirements
Fully amortized/no balloons
No pre-payment penalties for loan terms under 15 years
Three year pre•payment penalty for loans with a term greater than 15 years

Loan Purpose

Business/practice purchase
Partner/manager buyout Expansion through acquisition
Real estate purchase including ground-up construction and tenant improvements
Refinance existing business debt
Purchase equipment

How it Works

Maximum loan amount: $5 million
If your needs exceed the $5 million lending limit of the SBA, we have creative combination debt solutions allowing us to combine an SBA loan with a commercial loan
Interest rate: Varies based on dairy prime rate plus lender spread

Down payment:

Typically 10% of project amount
Collateral: Personal guarantees required from all owners of 20% or more of the business; Personal assets may be required to meet SBA collateral guidelines

The common loan terms for SBA7(a) loans are the following:

Business acquisition (no real estate)
-10-year maximum Machinery and equipment
• 15-year maximum
• Real estate (51% or more allocated to real estate) • 25-year maximum

Who's a Good Fit

Profitable existing business
Acceptable debt service coverage
Good personal credit score (650 minimum)
Two-year average net profit after taxes up to S5 million
Located in the United States
For-profit business

What We Need to Get Started

Purpose of the loan
Business background and plan
Business debt schedule
Personal tax returns (three years)
YTD financials
Personal financial statement
Other eligibility information (personal background, character, credit)
Resume
Business tax returns and financials (three years from existing business and/or selling business)
Projections

The data supplied by the SBA reflects 7(a) highest dollar volume during FY 2021 | 2. If your needs exceed the $5 million lending limit of the SBA, we have creative combination debt solutions allowing us to combine an SBA loan with a commercial loan.

7(A) At-A-Glance

Maximum Loan Size : $5 million Repayment Terms : Up to 25 years

Pricing

Variable
multi-year adjustable

Prepayment

5-3-1 for loan terms greater than 15 years

Borrower Type For-profit business

SBA 7(A) 1 page PDF Download

SBA 2nd most Popular Loan

SBA 504 Loan

SBA 504 Loan may be a viable option if you're looking to expand, purchase commercial real estate or heavy machinery and equipment.

Unlike other SBA loans, three parties are involved with financing each SBA 504 loan—the borrower, the bank, and the SBA-approved certified development company (CDC).
A portion of these loans is guaranteed by the government allowing small business owners to obtain capital with less equity than conventional loan requirements.
With our SBA provider's dedication to efficiency. collaboration and deep knowledge of small business lending, we'll take you where you need to go.

Advantages

A low down payment (typically 10 percent) conserves your cash
Fixed or multi-year fixed available

Loan Purpose

Purchase existing building
Land acquisition and ground-up construction (includes soft cost development fees)
Expansion of existing building
Finance building improvements
Purchase equipment
Refinance in conjunction with expansion

How it Works

50% bank loan, SBA (CDC) loan (20-25 year fixed rate), borrower down payment
Minimum equity requirements 10% to 20% (subject to CDC and SBA approval and based on property use and length of time in business)
51% owner occupancy required for existing building,
60% owner occupancy required for new construction
Equipment with a minimum 10-year economic life
Generally, the project assets being financed are used as collateral
Personal guarantees of the principal owners of 20% or more ownership are required

Who's a Good Fit

For-profit businesses operating in US
Strong personal credit
Project must create or retain jobs or promote other public policy goals

What We Need to Get Started

Purpose of the loan
Business background and plan
Projections
Business tax returns and financials (from existing business and/or selling business)
Personal tax returns
Personal financial statement
Resume
Other eligibility information (personal background, character, credit)
Business debt schedule

504 At-A-Glance

Maximum Loan Size : $15 million Repayment Terms : Up to 25 years

Pricing :

Floating or multi-year fixed available

Prepayment:

Bank Loan:
3-5 years declining

SBA Bank Loam: 10 years declining Borrower Type: For-profit business

SBA 504 1 page PDF download

Hedge Fund ERTC Advance gets You a 75% US Govt Backed Loan

With Interest Rates Skyrocketing it is Time to Diversify Lending Sources

SBA loans with our SBA Banks close 30 days Faster

Loan Amount Varies by product, SBA 7(a) up to $5 million and SBA 504 up to $15 million
Loan Term Up to 25 years
Equity Requirements Minimal equity injection required
Interest Rate Varies by loan type
Feb 28, 2022 SBA 504 loan was Prime + 2.75%
No origination fee, no prepayment penalty.

We promote to small business owners SBA-backed funding through US Banks with a preferred status within the SBA loan program.

The US banks we recommend have the authority to make final credit decisions without going through the SBA first.
This typically saves you 3 to 4 weeks in getting you an answer compared to the Bank you probably use.

Usually, our SBA lenders also offer you

longer repayment terms,
lower payments, and
no prepayment penalties (except on commercial real estate).

The most common SBA loan is SBA 7(a) since it it offers flexibility on terms and business uses.

An SBA 7(a) loan is a good option for :

1. acquisitions,

2. partner buyouts,

3. real estate purchases,

4. refinance and more.

Advantages: Up to 90% bank financing Fully amortized/no balloons No pre-payment penalties for loan terms under 15 years

SBA 504 loan (see 1 page PDF below)

While the eligibility requirements for a 504 loan are nearly the same as for the 7(a) loan program, the approved uses of the loan are different. They fall into three main categories:

1. buying commercial real estate,

2. financing improvements within that real estate and

3. purchasing large equipment.

Advantages: Low down payment (typically 10%) conserves your cash, fixed or floating interest rates available Loan amounts up to $15,000,000.

400% to 600% FEDERAL RESERVE Interest Rate Increase to Banks

Top 12 US Banks predict the Federal Reserve will increase the current 0.25% rate by 1.75%.

Read Reuters Article to verify