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:

  • Longer term financing
  • Improved cash flow
  • Properly structuring the balance sheet, matching long term assets with long term debt

SBA 7(A) LOAN STRUCTURE

Typical financing structure of the SBA 7(a) program:

  • Up to 85% on loans under $150K
  • Up to 75% on loans over $150K
  • Maximum limit of $5MM of which SBA will guarantee no more than $3.75MM

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.
SBA Lender Decal

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.

SBA 504 LOAN STRUCTURE

Typical financing structure of the SBA 504 program:

  • A financial institution provides 50% of funding for project costs
  • SBA/BLP provides a direct loan for up to 40% of financing for  project costs
  • Borrower provides a minimum of 10%* equity towards project costs

  CALCULATE LOAN

 

atw miller graph

                    atw miller graph 03 50% Lender   

                    atw miller graph 02 40% SBA 

                    atw miller graph 04  10% Borrower
An additional 5% cash equity is required in each situation below reducing SBA/BLP’s financing portion:
  • New Business: Defined as Less than two years old
  • Single Purpose: The building being purchased or constructed is considered as not easily converted to other uses, i.e. gas station, hotel.

CONTACT A BLP EXPERT
  
 
 
 
UNION GROVE MAIN
 

LENDERS BENEFITS


REDUCED RISK

SBA is a secondary lender, providing a direct loan in a subordinate lien position improving the bank's collateral position and reducing risk.

INCREASE SMALL BUSINESS LENDING

The bank's exposure is reduced by partnering with SBA on the financing of a project. By mitigating their risk through these program, banks can provide more loans and offer opportunities to more businesses. Additionally, banks can provide more loans to the same business where legal lending limits may be constricting.

OBTAIN CRA CREDIT

When using the SBA 504 program, banks can potentially obtain CRA credits by participating in one of our lending programs.

EXPAND OFFERINGS

Both the SBA 504 and 7(a) loan programs complement and add to conventional loans, which allows lenders to offer terms otherwise not available.
SBA 504 - BLP works directly with lenders and applicants to structure, package, process, close, and service the SBA loans.
SBA 7(a) - The ATW Group works directly with the lenders and applicants on all SBA 7(a) needs.
Combined SBA 504 and 7(a) - BLP and The ATW Group provide a streamlined process structuring the most beneficial financial package possible.

  

BORROWERS BENEFITS

 

LOWER DOWN PAYMENT

SBA 504 - The borrower may provide a cash down payment as low as 10% of the total funding needs, allowing them to save their cash for other business needs.
SBA 7(a) - Financial institution determines down payment.
DOWN PAYMENT

SBA 504 - The borrower may provide a cash down payment as low as 10% of the total funding needs, allowing them to save their cash for other business needs.
SBA 7(a) - Financial institution determines down payment.

504 GUARANTEED FIXED RATE

SBA 504 - The borrowers do not have the risk of an increase in the interest rate on the SBA loan making long-term planning for the business easier because borrowers know the amount of their mortgage payments for the next 20 years.
SBA 7(a) - Financial institution determines rate terms.

LONG TERM

SBA 504 - Loans are made for 10, 20 or 25 year terms. Longer terms result in lower monthly payments for the borrower without the concern of balloon payments due prior to the loan maturity.
SBA 7(a) - Loans are made for up to 25 years for real estate and up to 10 years for equipment and working capital.

LOW INTEREST RATES

SBA 504 - Government guarantee allows lenders to provide funding with low interest rates.
SBA 7(a) - Financial institution determines interest rates, however, SBA sets the maximum rates lenders are permitted to attach to an SBA loan.

 

 

ELIGIBILITY

WHO IS ELIGIBLE?

FOR-PROFIT BUSINESS  

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.

SMALL BUSINESS  

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.

OCCUPANCY REQUIREMENT  

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.

 

INELIGIBLE BUSINESSES

  • Non-profit businesses
  • Lending institutions
  • Insurance institutions
  • Gambling organizations
  • Businesses of a prurient nature
  • Businesses of restricted nature that exclude based on race, sex, or creed
  • Speculative businesses/development
  • Businesses located in a foreign country

ELIGIBLE USE OF FUNDS

 
  • Land Purchases
  • Site Improvements
  • Existing building purchases, expansions or renovations
  • Business Assets Purchase
  • New construction
  • Equipment purchase and installation
  • Projected related costs such as furniture and fixtures, title insurance fees, legal fees, appraisals, environmental reports, architects fees, survey costs, points on bridge loans, etc.
  • Refinancing – Limitations apply

ADDITIONAL 7(a) ELIGIBLE USES

  • Working Capital
  • Inventory
  • Vehicles licensed to be on the roads (trucks, cars)
  • Stock purchases

 

STILL HAVE QUESTIONS? WE CAN HELP

 

SBA 504 APPLICATION PROCESS

 

Contact a BLP representative before submitting a full application to prequalify for the programs based upon applicant eligibility. 

NO APPLICATION FEES

 

 

PRE-QUALIFICATION

Business Lending Partners (BLP) provides up-front eligibility screening services to determine if a small business meets the general criteria to qualify for an SBA loan. Contact BLP today to discuss your project.

 

 

BLP APPLICATION

A BLP representative will work with the small business and the participating lender to collect all required documentation.

 

 

BLP APPROVAL

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.

  

SBA APPROVAL

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 AUTHORIZATION

SBA will issue its Loan Authorization upon approval which outlines the terms and conditions of the SBA financing.

 

 

3-4 WEEKS FROM FULL APPLICATION 

CONTACT AN EXPERT TO GET AN APPLICATION STARTED

 

SBA 504 ELIGIBILITY CRITERIA

 

The SBA administers the program with the objective of providing financing to projects that meet one of the following economic development objectives:

Meets Community Development Goals
Meets Public Policy Goals

COMMUNITY DEVELOPMENT GOALS

  • Improving, diversifying or stabilizing the economy of the locality.
  • Stimulating other business development.
  • Bringing new income into the community.
  • Assisting manufacturing firms (North American Industry Classification System (NAICS), Sectors 31 “ 33).
  • Assisting businesses in Labor Surplus Areas as defined by the Department of Labor.

PUBLIC POLICY GOALS

  • Revitalizing a business district of a community with a written revitalization or redevelopment plan.
  • Expansion of exports.
  • Expansion of small businesses owned and controlled by women.
  • Expansion of small businesses owned and controlled by veterans (especially service-disabled veterans).
  • Expansion of minority enterprise development.
  • Aiding rural development.
  • Increasing productivity and competitiveness (retooling, robotics, modernization, competition with imports).
  • Modernizing or upgrading facilities to meet health, safety, and environmental requirements.
  • Assisting businesses in or moving to areas affected by Federal budget reductions, including base closings, either because of the loss of Federal contracts or the reduction in revenues in the area due to a decreased Federal presence.
  • Reduction of rates of unemployment in labor surplus areas, as such areas are determined by the Secretary of Labor.