SBA Loans

Many SBA loans are used to buy the business along with the real estate?

Then there are others who own an existing business on leased property and have arranged to buy the property

Either way, SBA financing may the best way to go for these scenarios.

SBA financing is slightly more complicated to work with than conventional financing. Get the basic understanding of it here.

SBA loans are basically for the owner user. In other words, for the business person who intends to occupy the majority of the space in the property. Fifty one (51%) or better is acceptable

Here are a few examples of owner user property types;

Owner User Manufacturing

Owner User Studio

Distribution Warehouse

Owner User Fast Food

Here at Phoenix Capital Consulting, we deal primarily with 2 types of SBA loans. They are the SBA 504 and the 7a SBA business loan.

The SBA 504 is by far the most popular among the two because it is a fixed interest rate product. The 7a is basically an adjustable loan product and therefore is less often requested.

The beauty of the SBA loan is that your down payment into your purchase transaction can be as low as ten percent (10%) down.

The 504 loan...

• You pay on 2 mortgages
• It is comprised of a 1st & 2nd trust deed
• They both have a fixed interest rate
• It is used for the purchase of the property for the business
• The real estate is collateralized

The 7a loan...

• You pay one mortgage
• It is an adjustable loan
• Used when purchasing business, equipment, inventory
• Lender files a "blanket lien" on borrower's personal residence, equipment and inventory

Conditions of borrower...

• Borrower must be financially healthy/stable
• Credit needs to be from good to excellent
• Positive cash flow is required from borrower to ensure adequate debt coverage
• Aside from mortgage and debts, borrower needs to have adequate income to live on

SBA 504 loan structure

SBA 7a loan structure

If you aren't sure which loan is a fit for your particular situation, don't worry...we'll figure it out for you.

We can analyze your transaction and get you prequalified with one of our preferred lenders.

The documentation required by the lender in order to prequalify a borrower for owner user/SBA financing is the following;

• 3 yrs personal & business tax returns (federal only)
• Current personal financial statement
• Business debt schedule or balance sheet
• Interim financial statements

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