3 KEY POINTS TO UNDERSTANDING WORKING CAPITAL LOANS

An SBA loan is a business loan that is guaranteed by the SBA. There are many types of SBA loans to suit each client's needs and each has different requirements. Here we explain in more detail what they consist of and also list some examples.

To qualify for an SBA loan, your business needs to be legally incorporated for at least 3 years, have at least a minimum credit score of 650 points, and have minimum sales of at least $ 30,000 a month or $ 350,000 a year.

CAPIFINDERS offers different products that might be the solution for your business growth. 

An SBA loan is a business loan that is guaranteed by the Small Business Administration (SBA). The SBA, except for the EIDL program, does not lend directly but guarantees up to 80% of the loan made by an SBA authorized lender. 

This means that if the borrower defaults on the loan, the SBA will cover up to 80% of the value to the lender. 

This guarantee allows the lender to grant lower rates and longer terms to borrowers.

WE ARE SIMPLIFYING THE SBA LOANS:

• Consultation, analysis, and pre-qualification in 24 hours

• We help you prepare the whole process

• Use of open funds

• You do not have to wait 30, 60, or 90 days to receive your payment

THERE ARE SEVERAL LOAN PROGRAMS GUARANTEED BY THE SBA, THE MAIN ONES BEING:

• 7 (a). 

  • The 7 (a) program is the SBA's most popular program and serves to meet the greatest number of business spending needs, such as working capital, debt refinancing, and certain expansion needs. 

  • The maximum amount to which you can apply for this program is up to $ 5 million and with repayment terms of 5 to 25 years. 

  • Rates can vary between 6 and 9% APR. 

• CDC 504 Program. 

  • This program is designed for the need to purchase large fixed assets such as business property, large machinery or large equipment. 

  • The program has a maximum application amount of up to $ 5.5 million and repayment terms of 10 to 25 years. 

  • Interest rates fluctuate between 4 and 5% APR

• Microloan Program. 

  • This program is ideal for starting a new business or expanding an existing one. 

  • This program has an application amount of up to $ 50,000 and a repayment term of 1 to 6 years and interest rates fluctuate between 8 and 13% APR.

THE MAIN REQUIREMENTS TO APPLY FOR AN SBA LOAN ARE THE FOLLOWING:
For the 7a, 7a express, and 504 programs: 

• The business is legally established for at least two years 

• The business owners have a credit score of at least 650 points

• The business owners are citizens or permanent residents of the US

• The business can prove that it has the ability to repay the loan 

SBA loans are loans that require a large amount of paperwork and require some preparation on the part of the business.

THESE ARE THE MOST REQUIRED DOCUMENTS FOR SBA LOANS:

• Business tax return for the last 3 years

• Personal tax return for the last 3 years. 

• Business financial statements: Income Statements (P&L) and Balance Sheet

• List of business assets

• List of business debts

• Personal financial statement (in a format established by the SBA)

• Financial projections for the next 24 months establishing the performance and use that will be given to the funds received and how they will multiply the business income with the respective assumptions

• Business plan establishing (no more than 10 pages) to establish what the plan is for the company can achieve the proposed objectives

• IDS of the owners

• Bank statements of the last 6 months of the business

According to the latest changes generated by the SBA, starting with the coronavirus pandemic, SBA loans greater than $ 350,000 require an asset-based guarantee. Now, any loan greater than $ 25,000 will require a Personal Guarantee, which means that if the business cannot cover its loan, it is the business owner who must cover it with their income and personal assets. 

One of the main challenges for SBA loans is the processing time that an SBA process can take, plus the documentation, and the number of qualification requirements involved. 

On average, a 7 (a) and 7 (a) express process can take between 45 and 60 days, and a 504 process that involves an asset can take between 4 and 6 months.

At CAPIFINDERS, we have simplified the work process to be able to improve and facilitate the application process to an SBA Loan, both for the pre-qualification process and for the preparation process that implies being able to apply, in addition to having a network of lenders that allows us to make the process easier for you and more comfortable to wear.