Download - Buyer Seminar Presentation
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Presented by Bruce Hurta
Business Lending Manager
Members Choice Credit Union
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SBA loans can provide longer terms for borrowers
SBA loan guarantees give banker’s an added incentive to make small business loans
SBA loan guaranties allow banks to provide funds when bank policy prohibits a loan
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SBA Borrower RequirementsSBA Borrower RequirementsGood characterManagement expertise and
commitment to succeedReasonable personal contribution or
business equityFeasible business planSufficient collateralAbility to repay loan from projected
operating cash flow
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Basic 7(a) Loan Guaranty ProgramBasic 7(a) Loan Guaranty Program
You apply for a loan guaranty with an SBA participating lender for loans $2,000,000 and under
In some instances, lender submits application for SBA review and approval prior to disbursement of funds
Other banks have full autonomy
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TermsTermsFlexible maturities:
◦ Generally 7 to 10 years for equipment and working capital
◦ Generally up to 25 years for fixed assets: Real estate Construction
Interest rates:◦Negotiated between borrower and lender◦Typically cannot exceed prime rate plus
2.75%
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MaturityMaturity Total Loan Amount Total Loan Amount Guaranty FeeGuaranty Fee
Year or LessYear or Less Any amount up to $1 million Any amount up to $1 million 0.25%0.25%
Over 1 YearOver 1 Year $150,000 or less $150,000 or less 2.0%2.0%
Over 1 YearOver 1 Year Over $150,001 to $700,000 Over $150,001 to $700,000 3.0%3.0%Over 1 YearOver 1 Year Over $700,001+ Over $700,001+ 3.5%3.5%
* Fees apply only to guaranteed portion of loan* Fees apply only to guaranteed portion of loan
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Fee Calculation Example of Fee Calculation Example of Waived FeesWaived Fees
Total Loan x Guaranty % = Max. Guaranty Total Fee
$150,000 x 85% = $127,500 $ 2,550
$700,000 x 75% = $525,000 $15,750
$1,000,000 x 75% = $750,000 $26,250
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Financial Assistance