SBA & USDA Loans

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SBA 7a Loan

Borrower Benefits

Here are some SBA 504 loan benefits that you should know;

• Long repayment terms – reducing monthly payments
• Frees up cash to expand your business
• Low down payment of as little as 10% on multipurpose real estate acquisitions and as little as 15% on single-purpose real estate acquisitions
• Financing available for most industry types including: manufacturers, hotels/motels, gas station/convenience stores, restaurants, assisted living facilities, and daycares

Loan amounts

• Up to $5,000,000

Use of Proceeds

• Real estate – purchase, construction, renovation or refinance of commercial real estate – majority of space must be owner-occupied; loans up to $5 million
• Business acquisition – business, franchise or professional practice; loans up to $5 million
• Machinery & equipment – purchase or refinance; loans up to $5 million
• Start-up – franchised businesses, such as restaurants and hotels; loans up to $5 million

Terms

• Real estate – up to 90% financing, up to 25 years, prepayment penalty for initial 3 years (none after the end of year 3)
• Business acquisition – up to 80% financing, up to 10 years, no prepayment penalty
• Refinance – up to 25 years, prepayment penalty applicable for initial 3 years on terms greater than 15 years
• Rates are based on a spread over the Prime Lending Rate (rates vary depending on the specific strengths of the transaction)
• SBA Guarantee Fee is paid directly to the U.S. Small Business Administration; amount varies based on loan/guarantee amount; other customary fees also apply
• All SBA 7a loans are fully amortized and are assumable

SBA 504 Loans

The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization.  504 loans are made available through SBA’s community based partners.

504 Loan Structure

504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing10% of the project costs. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.

ow 504 Loan Funds May Be Used

The use of proceeds from 504 Loans must be used for fixed assets (and certain soft costs), including:

• Real estate – up to 90% financing, up to 25 years, prepayment penalty for initial 3 years (none after the end of year 3)
• Business acquisition – up to 80% financing, up to 10 years, no prepayment penalty
• Refinance – up to 25 years, prepayment penalty applicable for initial 3 years on terms greater than 15 years
• Rates are based on a spread over the Prime Lending Rate (rates vary depending on the specific strengths of the transaction)
• SBA Guarantee Fee is paid directly to the U.S. Small Business Administration; amount varies based on loan/guarantee amount; other customary fees also apply
• All SBA 7a loans are fully amortized and are assumable

Note

The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing (except for projects with an expansion component or that meet the temporary refinancing provisions

504 Loan Benefits for the Small Business

The 504 Loan program offers small businesses both immediate and long-term benefits, so business owners can focus on growing their business. Some of the top-level benefits include:

• 90% financing;
• Longer loan amortizations, no balloon payments;
• Fixed-rate interest rates; and
• Savings that result in improved cash flow for small businesses.

504 Loan Eligibility

To be eligible for a 504 Loan, your business must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, a business qualifies if it has a tangible net worth not more than $15 million, and an average net income of $5 million or less after federal income taxes for the preceding two years prior to application.

USDA Loans&gt

30 Year Mortgage, 620 Credit Scores & More

No Money Down

 For starters, a USDA loan is one of the only loan programs offered to the general public that allows you to finance 100% of your home’s value. That means no down payment of any kind!

Great Interest Rates

 USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.

Need a 620 score

USDA Loans .Net requires a middle credit score of at least 620. If you are close, apply and we can help.

Affordable 30 Year Terms

 USDA home loans also offers affordable 30 year terms. If you are a first time home buyer, or not, a USDA loan is the perfect fit.

Roll in Your Closing Costs

 A USDA loan allows you to finance in your closing costs up to the appraised value. Making the USDA loan the only mortgage on the market with this ability.

Location Qualification

To be eligible for a USDA Loan the home being purchased has to be located in an area deemed eligible by the USDA’s Rural Development department. Here is the link to the USDA Rural Development location eligibility checker page USDA Map

Income Qualification

Per USDA’s Rural Development guidelines there are household income caps for the program. These restrictions vary per county. The income caps include total household income. Not just the persons on the loan but any person that will be residing in the residence. Be sure to call us to verify if your income meets the USDA loan program guidelines for the USDA loans program in your area.

USDA Loans Underwriting Approval

There is a USDA loans requirement of credit that each borrower or borrowers must meet credit requirements. Your USDA loan application can receive an underwriting approval down to a 620 credit score, although it is much easier to get approved over a 640. Applicants must demonstrate repayment ability for the loan along with a job history of at least two years. If you have just graduated from school the two year employment history can be waived.