SERVICES
Business Plans 7a Loans
The 7a Loan Program is the most widely used and diverse program the SBA offers. The 7a loan can be used for Business Acquistions, Real Estate Purchase, Inventory, Partnership Buy-outs, Construction, Tenant Improvements, and Equipment Purchases to name a few. In most cases the maximum loan amount is $5 Million. The business applying for the loan must be for profit. This program is offered in all 50 States in the USA. A detailed business plan with financial projections that demonstrates the company will be able to repay the loan is essential when applying. Underwriters and Loan Committees take this presentation seriously when making a credit decision.
Business Plans 504 Loans
The 504 Loan Program is used primarily for acquisition of existing buildings, construction of a buildings, long term equipment and machinery. The business applying for the loan must be for profit. This program is offered in all 50 States in the USA. The 504 loan program uses not only a lender like a traditional bank but also uses a Certified Development Company (CDC). This means that the bank, CDC and the SBA will all review and make a credit decision. The business plan and projections will be essential in the approval process. The CDC, SBA and the Lender take this presentation seriously when making a credit decision.
What Are the 5 Cs of Credit?
The five Cs of credit is a system used by lenders to determine the creditworthiness of potential borrowers. The system weighs five characteristics of the borrower and conditions of the loan, attempting to estimate the chance of default and, consequently, the risk of a financial loss for the lender. The five Cs of credit are character, capacity, capital, collateral, and conditions.
KEY TAKEAWAYS
-
The five Cs of credit are used to convey the creditworthiness of potential borrowers, starting with the applicant’s character, which is their credit history.
-
Capacity is the applicant’s debt-to-income (DTI) ratio.
-
Capital is the amount of money that an applicant has.
-
Collateral is an asset that can back or act as security for the loan.
-
Conditions are the purpose of the loan, the amount involved, and prevailing interest rates.
SBA 7a and 504 Consulting
We help complete applications and review of supporting documents. Small business owners will understand the reasons documentation is being provided and the proper way to present supporting documentation. This can result in a faster loan decision. When a complete, well organized loan package hits a lenders inbox that deal will get looked at first. Your application will be complete and detailed. Requested supporting documents will be organized and labeled in a way that is easy for your lender to navigate. We can also provide an introduction to lenders that specialize in your type of SBA loan request.