SBA Program Overview

What is the SBA?

The US Small Business Administration (SBA) is an independent Federal Agency created by Congress to assist in the commencement, expansion, growth, and prosperity of small businesses.   In total each year, bank and non-bank lenders fund over $35 billion a year through their flagship program the SBA 7a program and over $12 billion through the SBA 504 program via 2^nd mortgage loans.  The SBA program has been one of the most successful ever implemented by Congress in 1953.  The program saw extreme growth since 2008 and is more available than any time in the program's history especially during the unprecedented events in 2020.

What is the 7a Program?

SBA does NOT provide direct funding but guarantees generally up to 75% of the loan to the lending institution.  Exporters of any size can qualify for up to a 90% guarantee.  Either percentage allows and encourages a lender to look outside of their normal credit box.  Generally, the minimum loan size is $250,000 up to a maximum of $5 Million.

Proceeds can be used for the following:

• Acquisition/Construction/Renovation of owner-occupied commercial real estate- 51% occupancy of the borrowing entity
• Furniture, Fixtures and Equipment Purchase
• Start-Up Financing
• Franchise Financing
• Business Acquisition
• Debt Restructure- (no owner equity can be cashed out. All collateral currently pledged must remain on any note refinances unless the loan is considered over collateralized per SBA advance rates)
• Working capital/Inventory can be incorporated into the above type of loan

Why Use A Guarantee Program?

• #1 reason is capital preservation via higher leverage and longer terms
• Up to 90% complete project financing for expansion or real estate purchases
• Up to 80-90% financing for start-up financing
• Extended terms of up to 25 years for real estate and 10 years for equipment
• Higher LTV allowed for hotel, car wash, storage facilities as compared to conventional financing
• Company has a concentration in client base
• A company needs to rely on projections to support repayment

Who Qualifies as a Small Business?

• Net Worth of the company does not exceed $15 million
• Last 2 years average historical net earnings do not exceed $5 million

General Credit Criteria:

• Good credit history
• Sufficient working capital
• Historical earnings or future projected earnings to repay the loan
• Management experience

Who is your SBA Specialist?

Melanie began her career in banking in 1987 with C&S Bank after graduating from The University of Georgia.  She attended banking and commercial credit school and transitioned from general banking to SBA lending in 1995.  Melanie has worked with national as well as local community bank lenders and has established and managed 3 SBA departments.  She brings her resources, skills, and quarterback approach to her clients in helping them pursue their passion of either owning their own business or buying their first commercial building.  She also has a specialty in debt refinance where she has been successful in saving companies thousands of dollars in annual debt service.   Over the years Melanie has funded well over $200 Million in various small business loans and is considered an expert in the industry.