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Finally a podcast that reveals valuable insights and best practices regarding the SBA loan program and application process, brought to you by SBA veteran, Ryan Smith, Principal Broker & Founder of ThinkSBA. ThinkSBA is a one of a kind Loan Brokerage serving small business owners and entrepreneurs in their quest to purchase real estate, acquire a business or franchise or obtain working capital.
 
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The most frequently asked question I receive by far is how long does the loan application process take to complete from start to finish. The quick answer is 45 - 60 days. The honest answer is it takes as long as necessary to complete all steps in the process. The next logical question is what are the steps. Here is a list of each step in order with…
 
The most frequently asked question I receive by far is how long does the loan application process take to complete from start to finish. The quick answer is 45 - 60 days. The honest answer is it takes as long as necessary to complete all steps in the process. The next logical question is what are the steps. Here is a list of each step in order with…
 
Applying for a small business loan can be stressful, grueling and confusing when you hear the dreaded NO from your bank. Does this sound familiar? Hello, my name is Ryan Smith, Principal Broker and Founder of ThinkSBA. If you are listening to this podcast it’s likely you are a small business owner or entrepreneur who is purchasing real estate, acqu…
 
Seller Discretionary Earnings referred to as SDE equals net profit, which is the sum of annual revenue minus expenses, plus add-backs of seller discretionary spending. SDE directly impacts enterprise value, buyers equity injection, loan amount, seller carry amount, and debt service coverage ratio which ultimately determines whether a loan applicati…
 
The most important step in the SBA loan application process is closing the loan. This is obvious, right? You would think so. However, many applicants make the mistake of focusing their attention on closing after it’s too late, and they've missed a critical step or piece of information that inevitably prevents them from closing the loan. An SBA loan…
 
Navigating the SBA loan program and application process can be complicated. For starters, the entire SBA loan program, including borrower eligibility requirements and all policies and procedures, is governed by the SBA’s Standard Operating Procedures Manual also known as the SOP for short. The SOP is a 400 page document filled with industry jargon …
 
Are you a business owner or entrepreneur applying for an SBA loan or planning to in the near future? If your answer is yes, then keep listening because this podcast was recorded specifically for you. In this podcast I reveal the science of obtaining SBA loan approval. That’s right, being approved for an SBA loan is a science and is based on the fol…
 
Business succession planning is vital to the longevity of any business. This is especially true when a business is owned by two or more individuals, for seldom do business partners share the same retirement and life goals. Therefore, a business is most likely to experience an interruption or even worse, the ceasing of operations altogether, when on…
 
Business owners purchasing or refinancing commercial real estate financed by an SBA 504 or 7a loan are required to hire a certified commercial appraiser to prepare a commercial real estate appraisal report which includes the “as is” value of the subject property on the day the report is delivered to the lender. Every loan applicant needs to know th…
 
The World of SBA Lending - 0:46 SBA Lenders are actively approving and closing loans. Everyone's pipelines are flush with loan originations. Underwriting is taking up to three weeks with the loan package sitting in the queue for nearly two of those three weeks. 25 year fixed Interest rates are as low as 2.9% for SBA 7(a) real estate purchases and r…
 
The Landlord Lien Subordination And Collateral Access Agreement is required to be executed during the loan closing process when an applicant receiving an SBA loan has secured an interest in real property through a commercial lease. Parties to the agreement include the SBA Lender, who is referred to as the Lender, the SBA loan applicant, who is refe…
 
Contrary to popular opinion SBA Loans are quite flexible. Case in point, The SBA Standby Creditor’s Agreement. This Agreement establishes the interest rate and loan terms of a promissory note between the buyer, referred to as the Standby Borrower and the Seller, referred to as the Standby Creditor, to mitigate three fundamental credit weaknesses in…
 
There are many instances where borrowers applying for an SBA loan to purchase real estate, acquire a business or franchise or obtain working capital for growth do not possess the required 10% minimum equity injection. The good news is that the SBA permits the applicant to receive a monetary gift to assist with the equity injection. This gift may be…
 
November 1st, 2018 the SBA combined SBA Form 159(7a) and SBA Form 159(504) into one form known simply as Form 159. Form 159 requires applicants to disclose services and fees charged by an Agent hired in connection with applying for an SBA loan whether a 7(a) or 504. The purpose of this form is threefold. To reduce fees paid by applicants in connect…
 
Form 2202 must be completed on behalf of the subject business requesting the loan and all affiliate businesses. Affiliate businesses are defined by the SBA as any business owned 51% or more by a 20% or more owner of the subject business. Form 2202 documents the subject business and affiliate businesses monthly debt obligations which is essential to…
 
Hello and welcome to the State of SBA Lending Address presented by yours truly, Ryan Smith, Principal and Founder of ThinkSBA. I help business owners and entrepreneurs find the right loan to purchase real estate, acquire a business or franchise or obtain working capital to grow or start their business. State of SBA Lending Address Topics Recent upd…
 
The SBA Statement of Personal History Form 912 must be completed by everyone who answers yes to questions 18 or 19 on SBA 7(a) Borrower Information Form 1919, Section II: Principal Information. These questions ask whether the individual principal applying has been arrested within the last six months or whether they have EVER, I want to stress EVER,…
 
The SBA 7(a) Borrower Information Form 1919 is required to be completed by every individual with 20% or more ownership in the applicant business entity whether applying for an SBA 7a or 504 loan. Completing this form is not complicated but there are a few things that are important to know. First, the form consists of 26 questions spanning two secti…
 
The Personal Financial Statement, often referred to as a PFS for short, is one of the most important documents to the loan application. The PFS must be completed by all individuals who own 20% or more of the borrowing entity and is to include all personal assets, liabilities, annual income and debt obligations. I want to stress personal financial i…
 
One of the most popular ways to become a business owner is to acquire an existing business. And the easiest way to qualify for financing is through the SBA 7a program. Before I highlight the advantages of the 7a program, I’d first like to raise the point that acquiring an existing business is not always the best route to becoming a business owner. …
 
In this episode I will answer the 10 most frequently asked questions I have received from business owners regarding the Paycheck Protection Program. Can I use loan proceeds to hire new staff? The answer is no, you must maintain current employment levels or re-hire employees laid off or furloughed and use 75% of loan proceeds on payroll. Can I use l…
 
Often business owners will want to acquire raw land and build or improve an existing commercial building to suit their unique business model and company culture.The SBA 504 and 7a Loan Programs are designed perfectly to meet this purpose. If you are currently contemplating whether to buy raw land to build or improve an existing building you’ll want…
 
How To Build Wealth Through The SBA 504 Loan ProgramThe SBA 504 Loan Program is a Federal Government Guarantee program designed to incentivize business owners to purchase commercial real estate to occupy their business. Be sure to browse other episodes in the SBA FM podcast library for more in depth knowledge of the SBA 504 loan program.A few notab…
 
Many small business owners are unfamiliar with pre-payment penalties associated with purchasing or refinancing commercial real estate through the SBA 504 or 7a guaranteed loan programs. So let me educate you on what they are and how you can avoid the pre-payment penalty trap.A pre-payment penalty is a fee charged by a lender to the borrower for mak…
 
The answer is no, not all SBA lenders are created equal. That’s because each lender applies the Small Business Administration’s Standard Operating Procedures manual, also referred to as the SOP, differently. For example, some lenders have developed internal lending policies that are more stringent than the SOP. These lenders favor prime borrowers w…
 
An SBA non-bank lender is a financial institution that does not accept customer deposits. Their sole reason for existing is to lend money to eligible small businesses in their community. On the other hand, a bank is a financial institution that solicits monetary deposits from their customers and in turn loans these funds to other customers such as …
 
As its name implies, a multi-purpose property is commercial real estate comprised of improved land with a building that has multiple purposes or uses as opposed to buildings that have a single-purpose o use.The primary determining factor whether a property is considered multi-purpose has to do with the design of the building and not the activity of…
 
As its name implies, a single-purpose property is commercial real estate comprised of improved land with a building that has a single purpose or use as opposed to a building that has a multi-purpose or use.The primary determining factor whether a property is considered single-purpose has to do with the design of the building and not the activity of…
 
Do I Need To Personally Guarantee An SBA Guaranteed Loan?The answer is yes, let me explain.It’s important to understand that the applicant or borrower is the business, not the individual owners of the business.Therefore, the business is primarily responsible to pay back the loan which is why this repayment source is referred to as the primary sourc…
 
Not every individual obtaining an SBA guaranteed loan is required to pledge their personal residence or any other real estate owned as collateral.However, banks, credit unions and non-bank lenders are required by the SBA’s Standard Operating Procedure manual to take the applicants personal residence or other real estate owned as additional collater…
 
The SBA 504 guaranteed loan program to purchase commercial real estate is comprised of two loans. One provided by an SBA Preferred Lending Partner and another by an SBA Community Development Corporation (CDC).SBA Guaranteed 504 real estate loan rates on the second portion also referred to as the Debenture are fixed based on the 5 year and 10 year t…
 
One of the first questions business owners ask when applying for a loan is what is the interest rate. In this episode of SBA FM you will learn how SBA 7(a) guaranteed loan interest rates are determined and what to expect in your own situation. SBA 7(a) guaranteed loan interest rates are determined by three factors: the SBA Standard Operating Proced…
 
Yes, E-2 non-immigrant visa holders are eligible to obtain an SBA guaranteed loan to acquire a business. However, there are several specific eligibility tests that must be met by management for the applicant business to be considered eligible.Number 1. The Application must contain assurance that management is expected to continue in place indefinit…
 
The SBA requires eligible borrowers to possess reasonable personal liquidity; such as cash, marketable securities or cash value of life insurance to inject the minimum equity percentage into the financing package.SBA 7(a) loan requests to purchase a business or franchise, buy out a partner, start up or expand a business or to obtain working capital…
 
The SBA 7(a) guaranteed loan program to purchase or refinance commercial real estate is comprised of one loan provided by an SBA Preferred Lending Partner which means more flexibility in determining eligibility and qualifying loan applicants.Generally, multi-purpose properties may be financed up to 90% loan to value while special purpose properties…
 
The SBA 504 guaranteed loan program to purchase commercial real estate is comprised of two loans. One provided by an SBA Preferred Lending Partner and another by an SBA Community Development Corporation (CDC).Generally, multi-purpose properties may be financed up to 90% loan to value while special purpose properties may be financed up to 85% loan t…
 
Yes you do. Financial projections provide potential lenders the information they require to make an informed decision regarding the future financial success of your new venture.You need to know these three things to ensure your financial projections are acceptable to the lender.First, your financial projections must span a minimum of 3-5 years.…
 
The simple answer is yes you do. The purpose of the business plan is twofold. Number one, it demonstrates to potential lenders your fitness as a business owner and entrepreneur to develop and execute a winning business strategy.Number two, it provides these same lenders the information they require to make an informed credit decision regarding the …
 
The answer to this question is yes and no. The reason why it isn’t black and white is because it largely depends on a few variables. So let me bring some clarity to this question.If you are requesting a working capital loan less than $350,000 then it’s likely tangible personal or real property, or in other words collateral, is not required. However…
 
There are many factors that determine how long it takes to apply for and close a loan. These factors include the experience and competence of your banker, the banks loan pipeline density at the time of your application, sufficient staffing levels, the banks internal processes including whether the bank uses automation efficiencies where possible or…
 
The SBA, or Small Business Administration, is a Federal Government Guarantee Program that incentivizes banks to make loans to businesses who would otherwise not qualify for various reasons, such as, lack of time in business, experience or personal liquidity, or poor credit history etc.The SBA incentivizes partners banks by guaranteeing between 75% …
 
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