During the last 5-7 years, the availability of financing for America’s small businesses has become increasingly difficult to obtain. The impact of the housing financing bust during 2008 negatively affected most banks within the small business-financing arena. As a result, most banks stopped lending to small business. Those banks that continued to lend to small business very often did so with the default guaranty programs provided by the US Federal government and state and local government agencies.
The US Small Business Administration a Federal Government Agency has several programs that it fosters to instill job growth in the US economy. The SBA does not make direct loans it provides financial backing to its lenders (US Banks, Credit Unions and Non-Bank Lenders) through financial guaranty (insurance) and access to federal debt programs for funding of long-term debt.
Conventional Loan Program
Conventional loan programs are available through Community Banks, Regional Banks, Insurance Companies and Private Investors (Hedge Funds etc.), and Hard Money Lenders. These types of loans are primarily underwritten using two fundamental credit standards. The first being cash flow and the second being loan to value. Of the two standards, the cash flow method is first and if the project does not meet cash flow requirements, more than likely the request will be denied regardless of loan to value (LTV). Assuming the loan has sufficient cash flow the next criteria will generally be the loan to value requirements. For conventional lending the typical LTV requirement is at least 75% LTV with some lenders also requiring the closing costs to be funded by the borrower outside of the deal. Most Community Banks, Regional Banks and some Private Investors work on the 75% LTV requirement. Hard money lenders will be more flexible with their credit standards however they will typical require a LTV of less than 60% which ultimately requires the borrower to have one equity injection into the transaction.
SBA Lenders has a direct relationship with a nationwide, direct private lender providing short-term commercial loans from $50k to $2.5M+. These loans can finance new construction, provide bridge financing, fund the purchase of non-owner occupied properties and provide real estate-backed lines of credit. This program lends to experienced real estate investors, commercial contractors and small business owners throughout the country.
Income Property Investments
SBA Lenders is also a participant in the investment property arena with the capability of funding, apartments, commercial buildings, self-storage facilities, warehouse etc. We are capable of making loans to individuals and businesses that are interested in purchasing or refinancing existing debt for these income-generating properties. Whether you are just starting a business or have been part of the investment property industry for ages, we are prepared to help you succeed. This can be a cost-effective solution to your investment real estate needs.
Other Financial Service Offerings
SBA Lenders has affiliations with several financial service companies that offer the following:
- Exit Planning
- Business Brokerage
- Market Strategy