SBA 7(a) Program

The SBA 7(a) Program is available for most SBA financing requests and can be utilized for a variety of purposes including new business set up, existing business acquisition, commercial real estate purchase, as well as debt refinance.

– The SBA 7(a) program provides maximum loan amounts of $5,000,000.
– Maximum terms may vary according to financing purpose.
– Non-Real Estate purchase transaction maximum term is 10 years fully amortized.
– Commercial Real Estate purchase maximum term is 25 years fully amortized.
– 85% Guaranty in effect with loan amounts of less than $150,000.
– 75% Guaranty in effect with loan amounts in excess of $150,000.
– Commercial Real Estate refinance with competitive interest rates.
– Small Business expansion, with leasehold financing as well as working capital.
– Equipment and machinery purchase financing is available.
– Small Business debt refinance (from existing Non-SBA financing) is available.
– Inventory purchase with competitive rates.
– Up to 90% financing is available and is subject to credit decision.
– Eligibility will be determined by satisfaction of established SBA guidelines.

Sample SBA 7(a) Loan Structure

Projection Loan Amount: $1,000,000
Loan Structure: 100% SBA Loan
Down Payment: 15% = $150,000
Loan Amount: $850,000
Loan Terms: 25 years Fully Amortized Loan – No due date
Interest Rate: Prime rate + 1.5% = 5.00%
Fee Structure: SBA guaranty fee of 2.25% and Bank packaging fee
Pre-Payment Penalty: 3 years (5-3-1-0%)
Early Pay-Down: Up to 20% of the outstanding balance annually
Collateral Requirement: 1st TD on subject property, UCC on subject business, Additional collateral required

SBA 504 Program

The SBA 504 Program is available for larger financing requests exceeding the SBA borrower financing limit of $5,000,000.

Highlights of Program
• 90% Loan-to-Cost Financing
• Below-Market, Fixed Interest Rates
• Longer Loan Amortizations

– SBA 504 program is an economic development program designed by the US SBA to assist in the financing of
fixed assets for small businesses.
– SBA 504 financing requirements include participation with a third party lender, with maximum financing of
50% of the requested loan amount provided by Bank.
– Minimum down payment of 10% required.
– SBA 504 financing is provided if the total financing request exceeds the SBA established limit of $5,000,000.
– Eligibility will be determined by satisfaction of established SBA guidelines.

Eligible Borrowers:
– For-profit, non-publicly traded businesses.
– Tangible business net worth not to exceed $15 million.
– Average net income of the business not to exceed $5 million over the previous two years.
– Personal liquidity of each principal/guarantor not to exceed the total project costs of the proposed 504 loan.
– Ownership must be comprised of 51% U.S. citizens or Legal Permanent Residents.

Sample SBA 504 Loan Structure

Building Acquisition	$ 1,000,000
Improvements	$ 0.00
SBA/CDC Fees	$ 10,800
Total Project Cost	$ 1,010,800
					Monthly	Annual
Source of Funds	Amount	Rates	Maturity	Collateral	Payment	Payment
Bank (50%)	$ 500,000	4.30%	10 Year (25 Yr Amortization)	1st Deed	$ 2,722	$ 32,672
SBA 504 Loan (40%)	$ 418,000	4.33%	20 Year (Full Amortization)	2nd Deed	$ 2,561	$ 30,736
Borrower (10%)	$ 100,000
Total (100%)	$ 1,010,800				$ 5,283	$ 63,408
Rates	Bank:	Rate, Terms and Payment are Estimated and will be provided by Bank.
	SBA 504:	Rates is FIXED at the time of the debenture sale.
Fees	Bank:	Private lender fees vary depending on lender policy.
	SBA 504:	SBA/CDC processing fees are included in the SBA 504 Loan.
	MISC:	Related costs may be included in the SBA 504 Loan including:
		Appraisal, environmental report (if required), and escrow closing costs
		(including insurance and legal closing costs).
Collateral	90% financing generally does not require additional collateral.