Small Business Financing & SBA Loans

How to Expand or Start a Businesswith SBA Government Guaranteed

Financing

Presented by: Mortgage WestLane Adler, Broker

Telephone: (818)-882-LEND (5363)http//www.mortgagagewest.net

SBA Business Financing

Small Business Administration Benefits of SBA Financing Types of Loans Available Allowable Use of Funds Underwriting and Eligibility Issues Other Financing Options How to Apply Questions and Answers

Small Business Administration

Works in Partnership with the Bank Encourage Banks to Lend to Business by

Guaranteeing the Loan Old Myths vs. New Process Small Business Development Centers Promote and Support Business Expansion Established 1954 www.sba.gov

Mortgage West Real Estate Financing

We Have Access to the Small Business Loan Exchange With 100 + Banking Partners available to you and Funding in all 50 states.

Our Managing and Regional Directors Have 30+ Years Experience in Many Areas of Financing, Including Commercial and Residential.

Our Goal: To Help Small Businesses to Increase Their Income and Save Money Through Government Guaranteed Financing.

Benefits of SBA Financing

#1 Benefit; Access to Capital Longer terms 7 to 25 Years Competitive Interest Rates Easier Qualifying Guidelines Lower Payments Start up and Established Business’ OK Low Down Payment, 10% to 30% Can be Assumable, SBA Approval

Available Loan Programs

7(a) Loans Patriot Express 504 Loans

Allowable Use of Funds

Start up Costs Hard and Soft Costs Working Capital Real Estate Purchase Equipment Franchise Purchase Refinance Existing

Debt

Business Acquisition Partner Buyout General Business

Expansion Machinery Inventory Payroll Advertising

7(a) Loans

Bank loans money, SBA guarantees up to 75% of the loan amount. (Currently 90%)

Loans up to $2,000,000, guaranteed loan amount is $1,500,000

Use for commercial real estate purchase, construction, improvements, debt refinance, equipment purchase, working capital, business expansion, revolving line of credit

7(a) Loans Terms and Fees

Minimum of 7 years; depends on lease Equipment, 10 -15 years Real Estate up to 25 Years Fully Amortized, no Balloon or Call Declining Pre Payment Penalty 5,3,1 Adjustable Rates, Prime + Margin or

LIBOR + 3 + Margin SBA Guarantee fee to 2 - 3.5% (Currently Waived) Form 159 Packaging Fee, $2,500 Other Third Party Fees

7(a) Eligibility

Must be for profit and legal Must be a small business; < $8 million net

assets & < $3 million average revenue For Real Estate must be 51% owner

occupied, 60% new construction Not a Felon Citizen or Permanent Resident Alien

What’s Not Eligible

100% Gaming, less than 20% of Revenue All Lending Companies Pawn Shops Adult Business’ Apartment Complexes Pure Investment Properties Mini Storage

Patriot Express

Same as 7(a) but for Veterans Maximum Loan to $500,000 SBA Guarantee up to 85% Fixed Term or Revolving Line of Credit Disabled Vets, Current or Widowed Spouse, Reservists and National Guard 51% Ownership

504 Loan Program

Real Estate Purchase or Construction and Expensive Equipment with 10 year Life+

Minimum is $250,000 Maximum Project Cost $8MM 50,40,10 Loan Bank Lends 50%,SBA/CDC Lends 40% Borrower Invest 10% Must be Owner Occupied Property

504 Eligibility

Same as 7(a) + No more than $8MM in net assets Fixed 1st 5 years, Adjustable based on Index

Flexibility- 3/1, 5/1 25 year amortization Fixed 2nd 20 year Term Prepayment Penalty on Both Loans

6 C’s of Underwriting

Credit Capital Collateral Cash Flow Capacity Character The Probability of Success.

Loan Package Components

Business Plan Tax Returns Financial Statements Use of Proceeds Statement of Equity Credit Reports Supporting Documents

Other Factors

Time in Business Owners Cash Investment Success of Industry Resumes of Key Employees Location Lease A Bigger Package is Better Compensating Factors

Eligibility

Restaurants? Yes Start up Business? Yes Equipment Purchase? Yes Practice Expansion, Partner Buyout? Yes Land Purchase and Construction? Yes Permanent Resident Alien? Yes Working Capital? Yes Real Estate Purchase? Yes

Financing Options

SBA Loans $150,000 to $8 Million SBA Revolving Lines of Credit $350,000 Commercial Real Estate Loans $52 Million

How to Obtain Financing

Initial SBA Eligibility Consultation Review Retainer Fee Agreement & Form 159 Complete Preliminary Application Letter of Intent Issued Complete SBA Application Submit Documentation to Lender Funding within 45 Days Funds Received – Wire or Check

Questions and Answers

1. Complete SBA Compliance Agreement2. Schedule Appointment for SBA Eligibility Consultation

Contact

Lane AdlerTelephone: (818)-882-9205

email: sba@mortgagewest