SBA LOANS

o 7A Program 

  • For Real Estate, for start-ups, and for business only loans. Only loan that can go by projections to get approvals
  •  MUST BE OWNER OCCUPIED 51%
  • Must have a 620 score minimum-higher the better
  • Property and business must cash flow-use a 1.2 DSCR minimum – the higher the better. Person’s personal debt must cash flow as well. NO STATED, can use projections – but projections must make sense and will be scrutinized 
  •  For business only,  50% or more collateralization
  • Loan amounts to $3 million currently
  • LTV – 90% for Real Estate / 80% for Business
  • MUST SKIN – NO 100% FINANCING WITH A SELLER SECOND
  • Can possibly get cash out to improve the business
  • Gifts are allowed
  • Experience may be overlooked with a strong franchise

• 504 program is for Real estate only, generally purchase only. No cash out. No projections allowed, must be historical cash flow. This is a 50% first with a bank, a 40% second from the SBA. These loans are much tougher to get done than a 7A. Rest of the rules are similar:

o 51% owner occupied

o 620 minimum score

o 1.2 DSCR, personal must cash flow

o Will go to 90% LTV, 10% must be from the borrower’s own seasoned funds, etc.

o Loan amounts can now go up to almost $9 Million