Important questions about SBA Loans
As an experienced broker at Peach Capital can save you valuable time and money; with over 5 years of experience, we know each bank’s risk level and specific loan requirements. Securing funds alone, can get you locked-in to higher rates, or worse, get you nowhere. Why pay more in the long run? I shoulder your stress and do your footwork by shopping for the best rates and terms. Applications are done correctly and are approved quickly utilizing my industry tips others may not know.
We use either large national banks or mid-size regional banks that are licensed in all 50 states.
No, We will not pull your credit score.
Did you know that every time a commercial bank pulls your credit score it will hurt your credit and may hurt your chances to secure a loan? I smartly advise my clients to pull their own credit score. Personal credit checks are identical to institutional credit checks and will not hurt your credit. An institutional credit check will be done only when I successfully secure a loan.
The Small Business Administration (SBA) is a small business advocate program of the federal government they also sets the standard minimum requirements. Although the SBA sets the standard guidelines, each bank has the right to autonomously set their own loan terms, conditions, and interest rates.
Conservative banks may not always give you the best terms compared to an aggressive bank.
Each bank will set their own interest rate; however, here are the guidelines from the SBA.
Concerning SBA 7a, 7a is NY Prime rate + 2.75% max. As for SBA 504, a borrower’s rate on the 504 portion of the loan is set when the project is completed and a debenture is sold on Wall Street. At this time the rate is fixed for the term of the loan. The rate tracks the 10 year treasury.
It is important to note that the SBA does not offer any type of loans. A small business applies for loan from a financial institution, such as a bank. As a lender, the bank decides to take on the loan internally, or because of applicant strength, will require an SBA guaranty in order to finalize the loan. An SBA guaranty is a lender insurance program which protects the lender from borrower non-payment. Please see links on my home page for more information.
A lender considers cash flow as the borrower’s primary repayment ability. Applicant character, management experience, collateral, and equity contribution are also important considerations. An SBA guideline requires business partners with at least 20% stake in a business to personally guarantee a loan. The SBA does not deny approval for a SBA guaranty loan solely due to lack of collateral; however, it can be used as a reason, in addition to other credit factors.
Repayment ability from the borrower’s cash flow is a lender’s primary consideration in the SBA loan decision process but good character, management capability, collateral and owner’s equity contribution are also important considerations. All owners of 20% or more of the business are required to personally guarantee the SBA loan.
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No, unsecured loans are very difficult in this market with conventional banks and there are other lenders who specialize in this field (Hard Money Lenders). We only specialized in Commercial loans, SBA 7a, and SBA 504 programs. SBA has a minimum credit requirement of 660 FICO score; because this is a set guideline we are unable to help you obtain an SBA loan if your credit score falls below 660, however we offer programs that can.
Our fees are a flat rate of 1% of your loan amount, paid by the borrower. Please be aware, that there is also an SBA guarantee fee, bank fee, and closing fees.
We work very hard for our client’s interests and we can only be fully compensated when we close our customer’s loan. If customers drops us because they are working with someone else, we have wasted hours of our time. Therefore, half of our fee is due upon a lender’s issue of the Letter of Intent (LOI). The other half of our fee will be due upon the completion of a loan. This protects us from customers who are working with several brokers simultaneously.
Loan approval averages approximately one week. Each bank’s loan committee meets together at their convenience. Issuance of funds averages about 45 days from loan’s date of approval. Much of that 45 day wait period is usually occupied by third party services, such as an Appraisal report (2 to 3 weeks average), Environmental report (2 to 3 weeks average), and CDC response (only for a 504 SBA program). The fastest WE have done an SBA Loan is 2 weeks, when all the appraisal reports were completed.
A lending committee usually looks at applicants as a number or a black and white application file. Our secret to successfully getting your loan approved is to smartly convey a subjective view. To accomplish this, we always fly out to meet potential clients, wherever they are in the U.S. I take pictures of clients, take pictures of future business location, research your community, and research potential customer demographics. We then attach our research work to your application. Our personal touch is hard work but it is crucial for lending committees to be intrigued on a very personal level by your application.
No, Other than the 1% loan commission fee. Everything is paid out of my pocket. Believe it or not, more than half our income is used to fly out to see our clients.
We live in a modern and complex world where experts in their particular trade advise people every day. If a person’s car has a broken transmission, he will see a transmission specialist. If a person has a heart problem, she will see a cardiologist. Buying a car? A car loan specialist would serve you best. As an expert in Commercial and SBA loans, allow me to help your dreams come true, in addition to saving you time and money.
Hotels, Motels, Restaurants, Franchises, and other Small business loans.SBA loan will pretty much cover all type of business loan except business that deals with Religion, Pornography, and alcohol…
P.S. As always, please take a minute to leave a comment on my blog. I want it to be a conversation rather than a rant from my soapbox.
P.P.S. And don’t forget my constant reminder: we’re still lending! Call 800-722-5956/email: email@example.com/fax 877-624-4455/live chat with us on the next wealth-creating commercial property ownership loan you know about.