November 1999 – After months of review and investigation Dave Turkin
“Talks” SBA 7-a loans which were developed to provide small businesses a
government backed guarantee so that businesses could obtain loans for a
broad scope of business purposes. These loans were designed for both
new businesses and established businesses. It is easier for established
businesses to obtain loans because they are usually less risk and have a
proven track record. One of the misconceptions is that the SBA does not
issue loans but provides a guarantee to the lending bank.
The
fees incurred related to SBA loans include two points closing costs
plus other costs that could incur such as accountant costs, business
planning costs, loan packaging fees appraisals or evaluations as well as
other miscellaneous fees that are charged prior to loan acceptance.
As
a borrower you should be aware that the SBA is going to add
restrictions to the loan which include personal guarantees, collateral,
and ability to future borrowings or indebtedness. The time period for
approval can be lengthy since your request has to be approved by the
bank or lender as well as the SBA. Like any loan request, past credit
history (usually FICA Score of 700+), past performance of debt coverage
of at least 1.2 times. If you are acquiring a business or starting a
business the rule of thumb is a minimum capital injection of 30-35% of
the loan amount. Any person that has more than 20% equity in the
business must be disclosed and will have to provide financial
information, collateral and guarantee the loan. If the business defaults
the bank and SBA will go after the collateral.
I
do not recommend SBA guaranteed loans to my clients specifically
because of the restrictions involved, the necessary collateral
requirements, costs involved, covenants and restrictions on both the
business and personally. The process can take months and months and
months for the approval and funding.
Business
owners and business people are looking for results, they may not need
immediate results but still waiting in excess of 30 days+ is the kiss of
death to many fast moving deals. Conventional and unconventional loans
for most business people have a timeline attached to them. Our clients
come to us with specific goals and outcomes and asking them to wait
weeks can be a challenge so asking them to wait months is near
impossible. Our resource library for lending institutions is large and
we can in most cases give our clients a realistic funding date and if
that date is not met it is usually something our client is missing at
the moment and not the institution.
We
assist all our clients with either preparing their loan package for
their bank or preparing their loan package and presenting it to our
lenders. We get the job done, call us if you are seeking funds to
purchase a business, expand your current business, build your inventory
or update your equipment. We can secure realistic funding for most all
your business needs and we are always accessible.
For More details you can also click here :- SBA Loan Firm Investigated, accessible business consultants
Media Contact:
Accessible Business, LLC.
Los Angeles, CA 91357
Phone: ( 800 ) 490-8362
Fax: ( 818 ) 264-7833
Website :- http://www.accessiblebusiness.com/
E-mail: info@accessiblebusiness.com
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