SBA Loan Secrets
SBA Loan Secrets
SBA Loan Secrets
George B. Heaslip
gbh7@mac.com
Call (561) 329-1315 for a free consultation
on loan needs from $400,000 to $5,000,000
Banks and non-bank lenders are now hoping for a credit score of 740
or higher.
Depending on the business type, real estate component (if any) and
loan amount, a required down payment can be from 10% to 25%.
Fortunately, via the SBA program, a seller standby loan is allowed.
This means that if the applicant does not have the full down payment
amount, or wants to keep a chunk for working capital, the seller
can hold a private note, usually for 2 years. For example, if 25%
down is needed, the buyer with 15% and the seller with 10% can, in
most cases, work. The seller collects, at the end on the standby
period, a fine return, usually at a 6% interest rate.
Believe it or not, there are banks out there now that want to see a
liquidity ratio of 12, or enough to cash in to maintain a similar life
style for 12 months. National and regional lenders look for this.
Summary: To capture a loan, the applicant hopefully has a credit
score of 740 or higher, relative management experience, a rock-solid
business plan and cash flow projections with assumptions. (That is
where George helps for a minor fee).