5 Easy Steps to Access SBA Business Financing. How to Engage with the Go-to Webinar Interface...
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Transcript of 5 Easy Steps to Access SBA Business Financing. How to Engage with the Go-to Webinar Interface...
5 Easy Steps to Access SBA Business Financing
How to Engage with the Go-to Webinar Interface
• Questions area in the task box• Type us a question so we know you understand• Ask us anything throughout the session
Intro: Tom Meyer
• Has been in the SBA Lending Industry for 16 years
• Has personally funded over 300 million in SBA loans
• Started Bridgeview Bank’s SBA Lending Division back in 4/2013
2008: Before the Lending Crisis… and After…!
Step 1 – Understanding loan programs – Overview of SBA Loans
”• SBA 7(a) – Flagship Program• Loan Sizes – up to $5MM
• Utilized for many business purposes• Real estate purchase, construction
and refinance• Business acquisition/partner buy-out• Equipment purchase, expansion and
start up financing • Combination of all - with one loan
• 7-25 Year terms and amortizations• Blended terms based on use of
proceeds• Lower equity requirements• No prepayments penalties for loans
under 15 years, 5%, 3%, 1% for loans over 15 years
Overview of SBA Loans
• SBA 504 Loan Program• Loan Sizes – up to $11MM for General Purpose Properties
• Utilized for real estate purchase, construction and refinance• Real estate purchase or construction
• Fully fixed rates
• 20 year terms and amortization
• Lower equity requirements
Elimination of the “Personal Resource Test”
The SBA dropped its personal liquidity requirements for 7(a) and 504 borrowers earlier this year
• The personal liquidity of owners 20% or greater no longer has to be reviewed
• In the past, owners with high personal liquidity may have been required to inject additional cash into the project
Why SBA Loans
• SBA loans provide longer terms and amortizations with no balloon payments
• They offer favorable interest rates• They allow a borrower to put down less equity injection• Loans typically do not have covenants • Similar to a home mortgage, make the payment on time and minimal
lender involvement
• Grow your business• Acquire real estate, equipment other assets• Purchase an existing business• Several corporate executives leave corporate America and look to
purchase existing small businesses• Starting a new business
Step 2 – Where can I use the money?
Step 4 – How Do I Prepare?What do I need?
• Corporate and Personal tax returns• Current personal financial statement• Current company financial statement• Debt schedule
Step 5 – Talk to an SBA Lending Professional
• Why• Saves time• No obligation• Quickly can qualify• No cost to know• Self qualify www.sbalendinghub.com
Sample Deals Done
• $3,719,000 -- Business Acquisition, Pet Supply Website• $4,023,000 -- Business Acquisition, Tool & Die Company• $1,137,000 -- Business and Real Estate Acquisition, Car Wash• $905,000 -- Real Estate Refinance, Bowling Alley• $2,800,000 -- Real Estate Construction, Auto Dealership• $260,000 -- Start-Up, Car Wash• $927,400 -- Business Acquisition, HVAC Company• $422,500 -- Real Estate Acquisition, Restaurant• $1,240,000 -- Real Estate Acquisition, Doctor’s office• $492,800 -- Business and Real Estate Acquisition, Daycare
7a Loan Structure Business Acquisition
Acquisition purchase price $1,029,000Working Capital $100,000SBA guaranty fee $21,200Business Valuation $2,500Closing Costs $6,500
Total Project Cost $1,159,000
Financing Structure Amount Rate Term Pmt. BBG SBA 7a loan (70%) $809,200 6.00% 10 yr. $8,983 Borrower equity (25%) $300,000 Seller Note (5%) $50,000
- 10 year term and amortization- Collateral position 20%- Cash Flow coverage ratio: 2.02x 2012, 2.27x 2013, 1.34x 2014, 4.59x in 2015 interim
Business Acquisition Example: Custom Lighting Manufacturer
7a Loan Structure Real Estate and Construction Loan
Land Acquisition $800,000Working Capital $300,000Construction $2,600,000SBA Fees $73,000
Total Project Cost $3,773,000
Financing Structure Amount Rate Term Pmt.
• BBG SBA 7a loan (78%) $2,684,500 6.00% 25 yr. $17,297 • Borrower Equity (22%) $790,500• Express Line $300,000
- Collateral position 100%- Cash Flow coverage ratio: Business Start-up
Real Estate Construction Loan Example: Urgent Care
7a Loan to Start Up a Business
Leasehold Improvements $13,750Inventory $105,000Furniture, Fixtures and Equip. $41,250Working Capital $54,000SBA Fees (Waived) $0Closing Costs $6,000
Total Project Cost $220,000
Financing Structure Pre 2009 Amount Rate Term
• BBG SBA 7a loan (68%) $150,000 6.00% 10 year• Borrower equity (32%) $70,000
Start-up Retail Bicycle Shop
Borrowers can instantly find out if they pre-qualify for a
SBA loan through SBALendingHub.com.
Getting pre-qualified is as easy as 1-2-3!
1. Plug information into our short intake form2. Get follow up information regarding business interests3. Receive the results of pre-qualification
SBA Lending Hub is powered by TomScore™, a simple yet powerfulscoring model for confidentially prequalifying potential borrowersfor SBA loans.
SBA Lending Hub Powered by TomScore™
Bridgeview Bank Group
• Chicago hometown community bank• 14 locations• $1.0 Billion in Assets• #5 SBA 7a and 504 lender in 2014
Review - 5 easy steps
• Understanding the SBA loan programs• Know what the SBA loan money can be used for.• Know the amount you need• Understand how to prepare • Talk to an SBA lending professional
Who to Contact?
Tom Meyer224-543-4047 office847-899-3793 cell [email protected]
Andy Lynch224-543-4058 [email protected] Corporate Woods Parkway, Suite 100Vernon Hills, IL. 60061