SBA LOAN PROGRAMS
The U.S. Small Business Administration (SBA) was established to help businesses secure financing. SBA programs reduce risk for lenders and enables easier access to capital. There are two primary SBA financing programs offered; the SBA 504 program which offers attractive real estate and equipment financing; and the SBA loan guarantee program which offers a more flexible use of funds. Together, these programs are great complements to each other and are often used together to fully meet business financing needs.
ATW Miller Group, LLC has partnered with Business Lending Partners (BLP) in order to offer SBA loans to potential borrowers. BLP is a Certified Development Company (CDC) who is an underwriter and servicer for SBA 504 loans. ATW Miller Group is able to work jointly in securing a SBA 7(A) loan. ATW Miller Group also assists customers in completing 504 loan applications.
SBA 7(A) LOAN PROGRAM
Through our partnership with Business Lending Partners, (BLP), ATW Miller Group, LLC, is able to offer the Small Business Administration (SBA) 7(a) Loan Guarantee program. The 7a program, is the most popular loan program offered by SBA.
The SBA 7(a) loan guarantee program is provided to our lender partners to mitigate risk. The program also allows lenders to use the program for small businesses that would not normally qualify for conventional financing through:
SBA 7(A) LOAN STRUCTURE
Typical financing structure of the SBA 7(a) program:
The interest rate, loan term, amount, down payment and the purpose of financing is negotiated between the lender and small business.
SBA 504 LOAN PROGRAM
The U.S. Small Business Administration (SBA) 504 loan program, offered by BLP, was developed by Congress to assist growing businesses by offering an attractive financing option for real estate and equipment needs. The SBA has structured the program to work in partnership with the applicant business’ financial institution. To apply for SBA 504 financing, the business and its financial institution would work directly with BLP. BLP acts as an administrator of the program and packages everything directly with the customer for SBA.
An additional 5% cash equity is required in each situation below reducing SBA/BLP’s financing portion:
WHO IS ELIGIBLE?
A business or other organization whose primary goal is making money (a profit), as opposed to a non profit organization which focuses a goal such as helping the community and is concerned with money only as much as necessary to keep the organization operating. The business must be a sole proprietorship, partnership, limited liability company, or corporation.
The business must be small as defined by SBA as those businesses with a net worth below $15 million and an average net profit (after taxes) for the last two years of below $5 million. The business can also qualify for the program by meeting other SBA size standards based on either number of employees or annual revenue, depending upon the industry.
LOCATED IN THE U.S.
The business must do business in the United States or its possessions. Ownership must be comprised of 51% U.S. citizens or registered aliens with green card.
For funding projects that include real estate, the business must intend to occupy at least 51% of the ‘Rentable Property’ for existing structures or at least 60% of the ‘Rentable Property’ initially (and 80% over time) for new construction projects. “Rentable Property” is the total square footage of all buildings or facilities used for business operations, which may include exterior space (except parking areas) that is actively used in Borrower’s business operations.
JOB REQUIREMENTS AND WAIVERS
The small business must meet the job creation/retention requirement or qualify for a waiver. The general requirement is one job per $75,000 in SBA funding for typical 504 loans, or one job per $120,000 for small manufacturers. If a business does not meet the job creation/retention goals of the SBA, they may qualify for the program under one of the other goals of the program.
A BLP representative will work with the small business and the participating lender to collect all required documentation.
BLP will structure the loan within SBA's guidelines and perform analysis on the creditworthiness of the company.
Loan Approval recommendations will be made by BLP's Loan Advisory Committee and Board which meet weekly.
The loan application will then be submitted electronically by BLP to SBA once all remaining documentation is collected, signed, and dated by the loan applicant. This process typically occurs the same day Executive Committee approval is received.
SBA will issue its Loan Authorization upon approval which outlines the terms and conditions of the SBA financing.