Ivanhoe Capital Is On A Mission To Transform The Negative Perception Of The SBA
Well, I can tell you from experience that most everyone’s pessimism and apprehension comes from a bad experience with either a lender, bank, or broker. That institution simply didn’t know what they were doing and really shouldn’t have been doing SBA loans to begin with.
THIS IS WHY WE ARE ON A MISSION – TO DEBUNK SOME OF THESE NEGATIVE STEREOTYPES…..BECAUSE WE KNOW WHAT WE ARE DOING!
When it comes to SBA loans you really have to seek out a professional who knows the ins and outs of the SBA and their everchanging Standard Operating Procedures (SOP) so you don’t waste your time. Then, also have a team that can package, underwrite, and close a loan efficiently and with a sense of urgency.
We have a team of highly skilled individuals who have a proven system to take you from Contingent Commitment, to approval, and then to close quickly. SBA loans can be complex, but when you have the experience and processes in place It becomes routine, like eating breakfast or brushing your teeth….It’s second nature to us now!
We work with you every step of the way to ensure the process is as smooth as humanly possible. We can anticipate any issues that might arise and mitigate them before they become problems because of our vast experience and knowledge.
Check out our “Success Stories” to see just a few of the loans we have structured and closed. Some of which needed some tender loving care to finally get to the finish line.
5 Reasons Why SBA Loans May Be Your Best Friend
01.
Up to 90% Financing
Try getting anywhere near that percentage in a conventional commercial loan? You won’t get close! The reason small business administration lenders can offer this is that the loans are backed by a guarantee from the United States government that states upon default the government will reimburse the bank right now up to 90% of the loan amount. That is why SBA lenders are able to offer much higher loan-to-value (LTV) than you will ever get with conventional loans.
02.
No Loan Covenants / Fine Print
This is the part that a lot of small business owners overlook and could be the kiss of death for them. All conventional commercial loans have covenants. If you break a loan covenant it can put you in hot water with the bank and you may end up in default and eventually into special assets even if you have made all your payments on time every month.
Here are four examples of loan covenants in the conventional commercial marketplace that do not exist in the SBA world:
- Minimum Net Worth requirement equal to the loan amount
- Fixed Charge Coverage Ratio where you must adhere to a minimum cash-flow standard set by the lender that you will have to prove every quarter
- Minimum Liquidity Requirements where you must have a certain amount of
- Minimum Debt-to-Equity Ratio meaning you must adhere to a certain percentage set by the bank of what they see as an acceptable amount of what the company owes as opposed to what it owns
03.
No Balloon Loans
SBA loans are fully amortized over a 10 or 25-year loan schedule. Most conventional loan programs for small businesses balloon after 3-5 years and then you either have to renew the loan and go through the underwriting process again, move the loan somewhere else, or pay it off.
04.
No Prepayment Penalty or Very Minimal
Most 10-year SBA loans do not have any pre-pay provisions at all. Most 25-year small business loans have only a 3-year pre-payment period.
05.
Roll Closing Costs Into the Loan
You can roll all your closing costs into the loan itself. Example: appraisal fee, environmental fees, attorney fees, title fees, and any other miscellaneous fees. Also, any fees you pay count toward your equity infusion in the small business loan which does not happen in conventional financing.
Find Out About Our Pari-Passu Loan Structure
Warning: Do Not Apply for an SBA Loan Before Reading This
Step 1 - Get Your Documents in Order
Also, a copy of your credit report would be helpful in order to do a global debt analysis of yourself. There will be more, but this short list is a good start for us to see if we can issue a contingent commitment letter to finance. We have a 95% closing ratio once we have issued a Contingent Commitment Letter.
Step 2 - Know the Rates
On certain instances we can even fix rates for the life of the loan as low as prime plus 1.00. Just know that if rates do go down in the future your loan will remain at the level it is fixed at.
Step 3 - Know the Fees
Usually, there is an SBA Fee of roughly 3% of the loan amount, which will be rolled up into the small business loan itself. This fee’s purpose is to act as a fund to cover the cost when a loan does go bad and must be charged off by the SBA. At times the SBA cuts these fees for certain transactions or discounts it.
There are also other closing costs, such as title fees, attorney fees, appraisal fees, and business valuation fees. These fees will be specific to your loan and what you are doing with your loan. Some of them may or may not apply to your scenario.
Step 4 - Know the Terms
Step 5 - Work with a PLP Lender, One That Knows What They Are Doing
We are on top of all the processes that go along the way and don’t allow small business loans to get stuck. Also, you will want to work with a Preferred Lender Program (PLP) which can approve a loan without having to get permission from the SBA prior. This will save two to three weeks in the process, and we are definitely a PLP lender who is ready to get you Approved and Closed quickly!
Ivanhoe Capital Advisors Is a Preferred Financial Service Company by Approved SBA Lenders
SBA 7a Loan Program (Since 1953
Business Acquisitions
Perfect for business acquisitions because you can use this loan type for enterprise value of businesses.
Real Estate Acquisitions for Your Business
Property must be 51% or more occupied by the business in order to qualify.
Equipment Purchases for Your Business
You can be eligible for up to 90% financing.
Debt Refinancing or Partner Buyouts
Up to 100% financing. You can even refinance an existing SBA 7A loan to another 7A loan if you can prove a 10 percent or more savings.
Terms
Up to 25-years for real estate and up to 10-years of business acquisition, equipment, and working capital. Can be blended terms if real estate is included with equipment or business enterprise value.
SBA 504 Loan Program (Since 1958)
Real Estate Purchases, Improvements, or Construction
Up to 90%. The property must be 51% or more occupied by the business in order to qualify.
Equipment Purchases for Your Business
You can be eligible for up to 90% financing.
Debt Refinancing
Up to 100% financing on real estate or equipment.
Terms
Typical loan structure is 50% first mortgage (Bank) / 40% second mortgage (Community Development Company) / 10% from Borrower.
Sba Loans Are Very Popular with These Small Businesses
Manufacturing
Retail
IT
E-Commerce
Electrical Contractors
Plumbing Contractors
HVAC Contractors
Health Care
Homecare
Medical Practices
Property Management
Truck Routes
Hotels & Motels
Auto Repair
Childcare
Agriculture
Gas Stations
Pool Services
Landscaping
Restaurants
Distribution
Self-Storage
Body Shops
Parking Lots
Education
Tree Services
Entertainment
Construction
Transportation
RV Parks
Dealerships
Franchises
Car Washes
Success Stories
A Fellow Banker Comes to Us Because He Knows His Bank is Too Conservative!
IT Acquisition That Was Worth the Wait – Even Though It Was Painful
The Man with the Plan to Build a Retail Empire Across Florida!
Tell Us About Your Business, Merger, or Acquisition
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info@icadvisors.com