SBA Loan Options

SBA Loans can help growing businesses purchase or renovate real estate, acquire fixed assets such as heavy machinery or specialized equipment, borrow working capital for ongoing financing needs, or fund the acquisition of new businesses.

General Qualifications

Your business is eligible for SBA financial assistance if it is:

• Operated for profit
• Organized as a sole proprietorship, corporation or partnership (including LLC and LLP)
• Doing business in the U.S. or its possessions
  
• Within the size guidelines found in the Basic Eligibility Requirements for each respective loan type:
  
  
  • SBA 7(a) - Basic Eligibilty Requirements
  • SBA 504 Loan - Basic Eligibilty Requirements

General Collateral and Loan Requirements

For many types of SBA loans, the assets being financed - such as equipment or real estate - serve as the collateral for your loan. However, principal owners must have acceptable personal credit histories and may have to pledge available business or personally owned assets.SBA financing requirements can include:

• Personal guarantees of owners with 20% or more ownership in the business. Personal guarantees from active owners with less than 20% ownership may be required.
• Accounts receivable and inventory, depending on collection history and marketability.
• Machinery and equipment.
• Real estate and improvements.

How Can I Get an SBA Loan?

After determining which loan program best fits your needs, Goldman & Klein will analyze your loan application based upon a combination of several factors.

Cash Flow Coverage

Cash flow sufficient to cover business debt service is required. Cash flow coverage is determined after owner’s withdrawals or officers' salaries, existing debt service and proposed debt service have been deducted. A sufficient amount of living expenses will be considered for sole proprietorships. Fluctuations in cash flow coverage must be explained.

Debt To Worth Ratio/Capital
Generally, a debt to worth ratio of 4:1 or better is expected, and required for start-up businesses. This ratio indicates to Goldman & Klein the equity within your business, or what the owners may have at risk. In cases where the debt to worth ratio is manipulated through forgiveness of debt, standby debt and market value balance sheet adjustments, you should fully explain the adjustment.

Collateral

Goldman & Klein does not set definite collateral coverage ratios, as these ratios may vary based on the individual loan request. In most cases, the primary assets of the business are required to secure the loan request.

Management

The amount of management’s direct experience in the business can determine collateral needs, pricing and overall viability of the loan request. Financial statements of existing businesses help indicate management’s abilities. Information should also be submitted on key management and guarantors, duties and responsibilities. For start-up businesses, resumes should be detailed enough to explain past history and how it relates to the start-up business.

Credit History

The borrower’s personal and business credit history are considered. Credit blemishes must be explained in order to justify continued credit consideration.

Conditions

You should also be prepared to address other conditions of your loan request that may affect the success of your business, such as industry trends, seasonality, location and competition.

If you have further questions, feel free to consult our SBA Loan FAQ, or contact us through our easy contact form. You are also we welcome to contact the management team with questions.

Call 1-858-602-7800 for a free consultation

.The Small Business Administration guarantees SBA loan funds toward projects in many different sectors, among them commercial loans used to purchase owner-occupied real estate, and entrepreneur-based small business ventures. The real estate types funded by Goldman & Klein's SBA investment bankers include retail store locations, offices, corporate headquarters, medical offices, hospitals, doctor's clinics, dental clinics, health clinics, spas, schools, colleges, university library expansion,early childhood education centers, shopping centers, , gas stations, auto repair, auto dealerships, apartments, hotels, car washes, gas stations, farms, nurseries, wholesale manufacturers, distributors, biotech companies, alternative fuel and ethanol plants, factories, warehouses, storages, and new commercial construction.

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