Presented by Bruce Hurta

Business Lending Manager

Members Choice Credit Union

SBA loans can provide longer terms for borrowers

SBA loan guarantees give banker’s an added incentive to make small business loans

SBA loan guaranties allow banks to provide funds when bank policy prohibits a loan

SBA Borrower RequirementsSBA Borrower RequirementsGood characterManagement expertise and

commitment to succeedReasonable personal contribution or

business equityFeasible business planSufficient collateralAbility to repay loan from projected

operating cash flow

Basic 7(a) Loan Guaranty ProgramBasic 7(a) Loan Guaranty Program

You apply for a loan guaranty with an SBA participating lender for loans $2,000,000 and under

In some instances, lender submits application for SBA review and approval prior to disbursement of funds

Other banks have full autonomy

TermsTermsFlexible maturities:

◦ Generally 7 to 10 years for equipment and working capital

◦ Generally up to 25 years for fixed assets: Real estate Construction

Interest rates:◦Negotiated between borrower and lender◦Typically cannot exceed prime rate plus

2.75%

MaturityMaturity Total Loan Amount Total Loan Amount Guaranty FeeGuaranty Fee

Year or LessYear or Less Any amount up to $1 million Any amount up to $1 million 0.25%0.25%

Over 1 YearOver 1 Year $150,000 or less $150,000 or less 2.0%2.0%

Over 1 YearOver 1 Year Over $150,001 to $700,000 Over $150,001 to $700,000 3.0%3.0%Over 1 YearOver 1 Year Over $700,001+ Over $700,001+ 3.5%3.5%

* Fees apply only to guaranteed portion of loan* Fees apply only to guaranteed portion of loan

Fee Calculation Example of Fee Calculation Example of Waived FeesWaived Fees

Total Loan x Guaranty % = Max. Guaranty Total Fee

$150,000 x 85% = $127,500 $ 2,550

$700,000 x 75% = $525,000 $15,750

$1,000,000 x 75% = $750,000 $26,250

Financial Assistance