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Tips on getting SBA Loan approval (accounting terms)

By Garrett36 Pierson36

 Thanks to American Recovery and Reinvestment Act, Small Business Administration set aside millions of dollars to temporarily waive the loan fees and increase the loan guarantee to 90% on certain types of businesses. Of course time is running out in getting fee free SBA loan.

Here are some ways to speed up the process for SBA Loan:

Financials - Lenders require three years of business and personal tax returns, up-to-date profit and loss statements, financial statements, executive summary, balance sheets and projections. For business acquisition or start up, you need to write a business and marketing plan. Basically, SBA lenders want to see if you are able to pay your monthly mortgage and other business obligations.

SBA lenders There are a lot of banks and commercial lenders offering SBA guarantee loans. However, borrowers must make sure that their lenders are right fit for them. For example, there are SBA Lenders that don’t finance gas stations, car washes or other similar type properties. Others may avoid business acquisition or start up. Most business owners assume that they can get business or commercial loan from their own bank since they have established a relationship. They apply for a loan through their inexperience business bankers and few weeks into the process they are told that their bank doesn’t cater to their business needs.

Back up lenders - It’s a possibility that you get a letter of interest from a SBA Lender and few weeks into the loan process, you get rejected. It is wise if you have other options to basically hedge your bet if possible.

We can help you - Our firm specializes in securing SBA loans for small to mid size business owners. Whether you are purchasing a commercial property for your business or acquiring a new business, City Capital Finance has the experience to structure SBA loan that matches your needs and requirements. We have relationships with many national and regional SBA lenders and we facilitate your SBA loan by setting up a bidding process among lenders to ensure you get the best terms and smartest capital available.

Here is how to Qualify for SBA 504 Loan:

The SBA 504 loan program allows small to mid size business owners to purchase a commercial property for owner/user building. Under this program, Business owners can purchase a commercial property with as low as 10% down payment and obtain longer term and more favorable rates. Following the SBA guidelines, over 90% of incorporated entities are qualified small businesses and eligible for our SBA 504 loans.

Eligible Borrowers:

For-profit, non-publicly traded businesses.

Tangible business net worth (including affiliates) not to exceed $8.5 million.

Average net income of the business not to exceed $3 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 resident aliens (Legal Permanent Residents).

Ineligible Borrowers:

Non-profits (except sheltered workshops).

Passive holders of real estate and/or personal property.

Lending institutions (mortgage brokers and correspondent lenders are eligible).

Life insurance companies (however, franchised agents are eligible).

Businesses located in a foreign country or owned by aliens.

Businesses selling products/services through a pyramid plan.

Illegal businesses.

Gambling concerns.

Businesses which restrict patronage.

Government owned entities (excluding Native American Tribes).

Businesses engaged in promoting religion.

Consumer and marketing cooperatives (producer cooperatives are eligible).

Businesses engaged in loan packaging.

Businesses owned by persons of poor character.

Businesses providing prurient sexual material.

Businesses that have previously defaulted on a Federal loan.

Businesses engaged in political or lobbying activities.

Speculative businesses.

If your business didn’t make this list, then it’s probably okay.

Ineligible Use of Funds:

Refinancing (unless debt has been in place for less than 9 months).

Working capital.

Inventory.

Rolling stock.

Business “good will” or “blue sky” (common in business acquisition financing).

To learn more, please visit www.easysbaloan.com or call us at 877-900-1211

Shawn Shayestehfar is the Brokers and Co-founder of Platinum Capital Realty and City Capital Finance. Shawn has been a real estate broker for may years and has extensive experience in Residential and Commercial real estate. He also specialize in commercial and business financing.

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Wednesday, October 28th, 2009 at 3:25 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.