The 7(a) Loan Program is SBA’s primary program for helping small businesses with financing guaranteed for a variety of general business purposes.
|UES OF PROCEEDS
· Equipment purchases (machinery, business vehicles)
· Business purchase/acquisition (100% change in ownership)
· Real estate purchase
· Land acquisition and real estate construction
· Real estate improvements
· Refinance of existing business debt
· Startup costs (case-by-case basis)
· Minimum- $10,000
· Maximum – $5 Million
· Inventory or working capital- Typically structured at 7 years but not to exceed a maximum of 10 years
· Equipment, fixtures, or furniture- Typically structured at 7 years but not to exceed a maximum of 10 years, it may not exceed the economic useful life.
· Real Estate, including acquisition, rehabilitation, renovation, or construction- Up to 25 years plus any interest period to reasonably complete the construction or improvements
· 7(a) Refinancing- Must coincide with the remaining useful life of the assets being refinanced or use of proceeds chart
|INTEREST RATE AND TERMS
· Variable Rates – based on Prime Rate based on dollar amount of loan and term
· Fully-Amortized over life of loan (No Balloon)
· Pre-Payment Penalty- Under $350,000- None, Over $350,000- 5,3,1%
· SBA Guaranty Fee- $25,000-$150,000- 2% $150,001 to $700,000- 3%, $700,001- $5Mill- 3.5% (SBA changes SBA fees from time to time)
· Lender may charge up to $2500 packaging fee.
· Must be for profit and meet size standards
· Good Character and credit management
· Must be an eligible type of business
BENEFITS FOR BORROWERS
· Long term financing
· Improved Cash flow
· Fixed Maturity
· No balloons
· No prepayment penalty under 15 years and $350,000
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