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The Barack Obama Administration recently enacted new SBA loan guidelines to allow entrepreneurs and business loans an opportunity to obtain SBA guaranty loans.  There several loan programs available. 

PBT Consulting is available to provide assistance from qualification-to-application-to-approval.  We have a loan referral program that can speed up the application and time to process your loans.  Depending on your credit, your loan can be approved with three days and funded within 30 to 45 days.

Kindly complete our brief questionnaire.  This information helps us understand the scope of your project and specific needs and  requirements.  This is also the only way for me to provide you a quotation and determine whether I am a good fit.  If you prefer, you can also contact me via email or call me directly.  My contact information is located below.  ALL INFORMATION HELD IN STRICT CONFIDENCE.  

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There are a lot of myths and untruths surrounding Small Business Administration (SBA) Loans.  We will try to clear these up one-by-one so you gain a better understanding:

SBA Loan Misconceptions



SBA makes loans directly to borrowers False.  The SBA does not loan money directly.  Only  participating bank and other lending institutions are allowed to make loans.  The SBA acts as a guarantor.  The SBA guarantees a certain percentage of each loan in the event the borrower defaults on making payments.
SBA loans are difficult to obtain for tanning salons False.  You hear this all of the time and one of the biggest misconceptions.  It is blatantly incorrect and people who tell you this, including some salon owners, are either ignorant or grossly misinformed.  Leasing companies are among the biggest spreaders of this propaganda.  The SBA looks at many factors including the credit worthiness of the borrower, the collateral, amount of the loan, purpose of the loan and loan-to-value ratios before making a decision.   
SBA loans take 3 to 6 months to obtain False.  It used to take up to three to four months to obtain an SBA loan approval.  SBA loans, depending on the SBA loan program, can now be approved within two to four weeks.  Once loans have been approved, funding can take place within 30 to 45 days.  A home loan, after appraisals, bank and termite inspections can take just as long, if not longer.
SBA loans require a lot of red tape and documentation False.  Documentation for SBA loans are, for the most part, the same as that required by most banks and lending institutions.      
SBA loans require a lot of bank fees Not true.  The SBA has a one-time SBA guarantee fee and prohibits banks and lending institutions from assessing other fees to.
SBA loans are hard to get and cost more False.  SBA loans are easy to obtain if you have good credit and liquidity.  SBA loans are, by far, at more attractive rates of interest than leasing and hard money loans. 
SBA loans are difficult to obtain if you are a business startup False.  SBA loans can be obtained by business startups.  Banks look at the underlying value of the business assets, collateral, credit worthiness of the borrower, business experience of the borrower and personal guarantees of the borrower.  If you meet these requirements and have a convincing business plan there is no reason why you cannot obtain an SBA loan.
SBA guarantees the loans so the borrower does not have to make any down payment False.  Banks make loans that are subject to the SBA's loan-to-value requirements (LTV).  These LTV requirements determine how much can actually be borrowed.   LTV ratios vary by SBA loan program.   SBA loan guarantees vary between 75% to 95% depending on the type and amount of loan. 

SBA Loan Programs

The SBA currently has four loan programs in place.  The characteristics of each SBA loan program is described below:

Loan Program

Program Characteristics

7(A) Loans

PURPOSE:  Purchase of real estate property, equipment, business acquisitions and working capital.  PROJECT SIZE:  $50,000 to $2,000,000.  LOAN AMOUNT:  70%-80% Loan-To-Value for start-up or business acquisition.  80%-90% for business expansions.  DOWN PAYMENT:  20%-30% for start-up or business acquisition.  10%-20% for expansion.   MAXIMUM GUARANTEE:  For those applicants that meet the SBA's credit and eligibility standards, the SBA can guarantee 90% of the loan amount.  TERMS:   20-25 years fully amortized.  INTEREST RATE:  A lender may charge up to 2.25% over Prime for maturities under seven years.   A lender may charge up to 2.75% over prime for maturities over seven years.  Rates can be 2% higher for loans $25,000 or less.   Rates can be 1% higher for loans between $25,000 and $50,000.  COLLATERAL:   Must be "fully collateralized", which frequently means a blanket lien filing on all assets of the business including A/R and inventory.   LOAN FEES:  A tiered system is in place that quickly rises to about 3% of the guaranteed loan portion.  QUALIFICATIONS:  Various employee size, revenue and net income standards that differ from one industry to another.  In many instances, a small business can qualify for a 504 Loan (See below) even though it would not qualify for a 7(a) Loan.  

504 Loans PURPOSE:  Purchase of owner-occupied commercial real estate property and equipment.  PROJECT SIZE:  $200,000 to $10,000,000.  LOAN AMOUNT:  90% Loan-To-Value of total project or equipment costs.  Includes financing of soft costs, closing costs and property improvements.  DOWN PAYMENT:  10% of eligible project costs (borrowers can roll in renovations, closing and soft costs).  An extra 5% is required for start-ups or special use properties.   MAXIMUM GUARANTEE:  For those applicants that meet the SBA's credit and eligibility standards, the SBA can guarantee 90% of the loan amount.  TERMS:   20-25 years fully amortized.  No balloon payments, calls or negative covenants.   INTEREST RATE:  Choice of fixed or floating on 1st mortgage portion.  Below market, long-term fixed interest rate on 2nd mortgage portion, fixed for the entire 20 years.   Fully amortized through term of loan.   COLLATERAL:   Only the real estate and/or equipment being financed.   LOAN FEES:   Average between 1%-1.25% of loan amount.  PREPAYMENT PENALTIES:  Flexible and negotiable.  Can pre-pay up to 20% of principal balance for first ten years with no prepayment penalty, defeasance penalties or lock-outs.   QUALIFICATIONS:  For profit, non-public businesses with less than $7 million in tangible business net worth, averages less than $2.5 million in net income over the last 2 years, and personal, non-retirement, unencumbered liquid assets not to exceed total project cost.            
The Microloan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $13,000.  Applications are submitted to the local intermediary and all credit decisions are made on the local level.   TERMS, INTEREST RATES AND FEES:  The maximum term allowed for a micro-loan is six years. However, loan terms vary according to the size of the loan, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower. The maximum loan amount is $35,000, however, the average loan amount is around $13,000. Interest rates vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally these rates will be between 8 eight percent and thirteen percent.   COLLATERAL:  Each intermediary lender has its own lending and credit requirements. However, business owners contemplating application for a micro-loan should be aware that intermediaries will generally require some type of collateral, and the personal guarantee of the business owner.  TECHNICAL ASSISTANCE:  Each intermediary is required to provide business based training and technical assistance to its micro-loan borrowers.  Individuals and small businesses applying for micro-loan financing may be required to fulfill training and/or planning requirements before a loan application is considered.


Patriot Express Loans
PURPOSE The Patriot Express loan program is for veterans and members of the U.S. military.  Can be used for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases.  PROJECT SIZE:   Maximum of $500,000.  LOAN AMOUNT:  Up to $500,000.  MAXIMUM GUARANTEE:  Maximum guaranty of up to 85 percent for loans of $150,000 or less and up to 75 percent for loans over $150,000 up to $500,000.  For loans above $350,000, lenders are required to take all available collateral.  TERMS:  Revolving loans are allowed up to 7 years with maturity extensions at the outset.   INTEREST RATE:  See 7(A) Loan interest rates.  COLLATERAL:  Lenders are not required to take collateral for loans up to $25,000.  Lenders may use their current collateral policy for loans over $25,000 and up to $350,000.  Lenders may take available collateral for loans over $350,000.   QUALIFICATIONSYou must be a member of the U.S. military or Veteran.   


Contact Information

Tommy Toy

PBT Consulting

Concord, CA 94521

Cell: (925) 768-1805

Fax: (925) 676-0693

Email: Turk5555@sprynet.com

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