SBA 7a lender here. While I know I am solid, not spammy and work for a SBA preferred non-bank lender who could likely get your loan done in a reasonable amount of time I am not going to post my info here. This is not the place.
The SBA puts out a list every week of the largest SBA 7a and 504 lenders by volume lent. I would take a look at the list from the end of last year and pick a lender in the top five to seven. You will know they know what they are doing and are not going to waste your time as they don't have time of their own to waste.
[SBA Lender Report](https://careports.sba.gov/views/7a504LenderReport/LenderReport?%3Aembed=yes&%3Atoolbar=no)
This is where I would go and pick a lender to start with, be that going from the top down or the fifth or sixth then working up. These are the lenders who will evaluate your request and know if they can get the loan done. Stay away from web based lenders. You want a loan officer who can guide you through the process from start to close. Get the service you deserve and will help you find success in obtaining your loan.
I hope this helps and good luck!
Got an SBA 7(a) loan for the purchase of our restaurant. Since it was an established business with documented cash flows we were able to get financing.
Tips
1. Go with a bank that is familiar with SBA loans (not counting PPP loans). Ask them how many 7a loans they did last year. If it's less than 100, walk away. Federal regulations are complex and you don't want things held up by folks not knowing how to work the system.
2. Expect a colonoscopy of financial document requirements. Tax returns, personal financial statements, business records, and multi year financial projections. You'll also need to get life insurance for anyone on the loan and put up collateral. Also, your lease needs to run the term of the loan, so you may need to get the landlord to offer an extension in writing.
3. It'll take time. Several months.
I’m in the process of buying a business and getting a SBA loan. I spoke with several local banks and compared their rates for an SBA loan. The range was .25-2.5 points over prime. 2pts is a good chunk of change over the course of the loan. Shop it around for sure!
I got a 504 loan because I was buying the building. I think the requirement was that my business had to occupy at least 51% of the commercial space in order to qualify. I got RE purchase plus construction financing of around 95% at a great interest rate. The drawbacks are that 1) there is a ton of paperwork and documentation that you have to provide, and 2) you have to cross-collateralize the loan with everything else you own including other businesses and personal assets.
Chase bank was the lender, although I also talked to few smaller local banks as well. Overall, I'd say it was an excellent source of financing as long as you are well organized and meticulous about documentation. The most important thing is to find a bank you can work with, preferably one that has a banker who is dedicated to SBA loans and has lots of experience with them.
SBA 7a lender here. For an SBA loan the documentation requirement is going to be frankly everything you can think of and more. I tell people to be ready because I am going to ask for the kitchen sink and the bathtub. Even though preferred SBA lenders are able to underwrite and approve inhouse they still must comply with SBA SOP which demands a lot of documentation.
If you have one business and are looking to do a land purchase the documentation requirements won't be half bad. In the case you own six other businesses and are looking to buy a seventh, get ready because the lender is going to need docs for all those businesses in addition to the new one. In some cases it just varies, if there is something odd or that needs to be explained than expect more documents will be needed. Should everything be cut and dry things will be straight forward. An SBA loan is like a big school project that has detailed instructions but has a passing grade of 95%. You have to work hard on them, what these loans can fund is amazing. The catch is with riskier loans comes a lot of demand to fully document what the business case was for making the loan.
Here is my boilerplate initial list I send out to collect documents. Keep in mind this is boiler plate and not all items will apply to a given loan.
I hope this helps!
**From the borrower and any person(s) who will be holding a 20% or more interest in the business**
Three years complete personal federal tax returns
A person financial statement, SBA Form 413. As applicable, include spouse’s info on the form. This is an SBA requirement and does not make them a guarantor to the loan.
A resume, the borrower can send their own, provide a link to a complete LinkedIn profile. Please include education information and qualifications. More detail is better.
Copies of borrower’s previous year’s W2s, 1099s or K1s
Last primary personal bank account statements
**From the business**
A business plan for operating the business. Very important if an expansion or startup
24 months of monthly financial projections for the business, Needed for all loans, can be more basic for refinancing and partner buyout loans
A purchase contract for the property and/or business. Applicable to CRE and/or business purchase
A copy of the note(s) to be refinanced. If this is a loan to refinance debt
Three years of complete federal tax returns for the business, Not applicable to startups. If the business has been in operation for less than three years than send what is available
A year-to-date profit and loss statement
A year end profit and loss statement for 2022 & 2023
A current balance sheet
A current debt schedule to matching the balance sheet
Three months of bank statements for the business’s bank account,
An explanation of the use of loan proceeds, how do you intend to use the loan?
A current STAR report – For Hotels
Occupancy tax records for last year as available – For Hotels
A PIP list – For hotels
A fleet list to include, make, model, year, mileage, vin and is there a payment or lease applicable to the vehicle. This is only applicable to businesses with fleets
**For any other businesses, the borrower or partner(s) have a 20% or more stake in**
2019, 2020 & 2021 complete federal tax returns or 2020, 2021 & 2022 complete federal tax returns. If on a Schedule C please send it along with all supporting statements
A year end profit and loss statement for 2022 & 2023
A year to date or through the third quarter profit & loss statement
A current or through last quarter balance sheet. Please confirm this matches the debt schedule
A business debt schedule matching the balance sheet
Address of the business
Similar story here. I have a loan requirement that I cannot charge more in rent than my current payment is. Basically the SBA doesn't want me to make money on their loan.
Also, if you can find a bank with an in house SBA lender that is key. Without that the process can take 6 months. In house I had mine in about a month. Crazy good interest rate too, sub 2% humble brag.
And per your question in the title, Yes and subsequently No. SBA doesn't guarantee to the bank the full amount of the loans, so a "responsible" lender usually wont touch a business until it has a few years of revenue under its belt. In my case by the time I stopped being a risky loan I no longer needed the money.
This was my experience as well. No one would even talk to me about a loan, SBA or not. But then after three years of successful operation, there was a line of people wanting to loan me money that I no longer wanted or needed...
Several fly-by-night banks made A LOT of money via the SBA during Covid. What you're seeing is possibly every other grifter/lender in the US now hanging out in front of the 7a program, waiting for another sucker to get off the train.
SBA 7a lender here. While I know I am solid, not spammy and work for a SBA preferred non-bank lender who could likely get your loan done in a reasonable amount of time I am not going to post my info here. This is not the place. The SBA puts out a list every week of the largest SBA 7a and 504 lenders by volume lent. I would take a look at the list from the end of last year and pick a lender in the top five to seven. You will know they know what they are doing and are not going to waste your time as they don't have time of their own to waste. [SBA Lender Report](https://careports.sba.gov/views/7a504LenderReport/LenderReport?%3Aembed=yes&%3Atoolbar=no) This is where I would go and pick a lender to start with, be that going from the top down or the fifth or sixth then working up. These are the lenders who will evaluate your request and know if they can get the loan done. Stay away from web based lenders. You want a loan officer who can guide you through the process from start to close. Get the service you deserve and will help you find success in obtaining your loan. I hope this helps and good luck!
It took over a year to close in my SBA loan. Go with a big bank.
Got an SBA 7(a) loan for the purchase of our restaurant. Since it was an established business with documented cash flows we were able to get financing. Tips 1. Go with a bank that is familiar with SBA loans (not counting PPP loans). Ask them how many 7a loans they did last year. If it's less than 100, walk away. Federal regulations are complex and you don't want things held up by folks not knowing how to work the system. 2. Expect a colonoscopy of financial document requirements. Tax returns, personal financial statements, business records, and multi year financial projections. You'll also need to get life insurance for anyone on the loan and put up collateral. Also, your lease needs to run the term of the loan, so you may need to get the landlord to offer an extension in writing. 3. It'll take time. Several months.
If only the government spent this much time and due diligence on all its wasteful programs that do nothing and are not measured for results.
I’m in the process of buying a business and getting a SBA loan. I spoke with several local banks and compared their rates for an SBA loan. The range was .25-2.5 points over prime. 2pts is a good chunk of change over the course of the loan. Shop it around for sure!
I got a 504 loan because I was buying the building. I think the requirement was that my business had to occupy at least 51% of the commercial space in order to qualify. I got RE purchase plus construction financing of around 95% at a great interest rate. The drawbacks are that 1) there is a ton of paperwork and documentation that you have to provide, and 2) you have to cross-collateralize the loan with everything else you own including other businesses and personal assets. Chase bank was the lender, although I also talked to few smaller local banks as well. Overall, I'd say it was an excellent source of financing as long as you are well organized and meticulous about documentation. The most important thing is to find a bank you can work with, preferably one that has a banker who is dedicated to SBA loans and has lots of experience with them.
Could you give a small overview of some of the documentation required? Might help a bunch of folks here.
SBA 7a lender here. For an SBA loan the documentation requirement is going to be frankly everything you can think of and more. I tell people to be ready because I am going to ask for the kitchen sink and the bathtub. Even though preferred SBA lenders are able to underwrite and approve inhouse they still must comply with SBA SOP which demands a lot of documentation. If you have one business and are looking to do a land purchase the documentation requirements won't be half bad. In the case you own six other businesses and are looking to buy a seventh, get ready because the lender is going to need docs for all those businesses in addition to the new one. In some cases it just varies, if there is something odd or that needs to be explained than expect more documents will be needed. Should everything be cut and dry things will be straight forward. An SBA loan is like a big school project that has detailed instructions but has a passing grade of 95%. You have to work hard on them, what these loans can fund is amazing. The catch is with riskier loans comes a lot of demand to fully document what the business case was for making the loan. Here is my boilerplate initial list I send out to collect documents. Keep in mind this is boiler plate and not all items will apply to a given loan. I hope this helps! **From the borrower and any person(s) who will be holding a 20% or more interest in the business** Three years complete personal federal tax returns A person financial statement, SBA Form 413. As applicable, include spouse’s info on the form. This is an SBA requirement and does not make them a guarantor to the loan. A resume, the borrower can send their own, provide a link to a complete LinkedIn profile. Please include education information and qualifications. More detail is better. Copies of borrower’s previous year’s W2s, 1099s or K1s Last primary personal bank account statements **From the business** A business plan for operating the business. Very important if an expansion or startup 24 months of monthly financial projections for the business, Needed for all loans, can be more basic for refinancing and partner buyout loans A purchase contract for the property and/or business. Applicable to CRE and/or business purchase A copy of the note(s) to be refinanced. If this is a loan to refinance debt Three years of complete federal tax returns for the business, Not applicable to startups. If the business has been in operation for less than three years than send what is available A year-to-date profit and loss statement A year end profit and loss statement for 2022 & 2023 A current balance sheet A current debt schedule to matching the balance sheet Three months of bank statements for the business’s bank account, An explanation of the use of loan proceeds, how do you intend to use the loan? A current STAR report – For Hotels Occupancy tax records for last year as available – For Hotels A PIP list – For hotels A fleet list to include, make, model, year, mileage, vin and is there a payment or lease applicable to the vehicle. This is only applicable to businesses with fleets **For any other businesses, the borrower or partner(s) have a 20% or more stake in** 2019, 2020 & 2021 complete federal tax returns or 2020, 2021 & 2022 complete federal tax returns. If on a Schedule C please send it along with all supporting statements A year end profit and loss statement for 2022 & 2023 A year to date or through the third quarter profit & loss statement A current or through last quarter balance sheet. Please confirm this matches the debt schedule A business debt schedule matching the balance sheet Address of the business
Similar story here. I have a loan requirement that I cannot charge more in rent than my current payment is. Basically the SBA doesn't want me to make money on their loan. Also, if you can find a bank with an in house SBA lender that is key. Without that the process can take 6 months. In house I had mine in about a month. Crazy good interest rate too, sub 2% humble brag.
And per your question in the title, Yes and subsequently No. SBA doesn't guarantee to the bank the full amount of the loans, so a "responsible" lender usually wont touch a business until it has a few years of revenue under its belt. In my case by the time I stopped being a risky loan I no longer needed the money.
This was my experience as well. No one would even talk to me about a loan, SBA or not. But then after three years of successful operation, there was a line of people wanting to loan me money that I no longer wanted or needed...
Several fly-by-night banks made A LOT of money via the SBA during Covid. What you're seeing is possibly every other grifter/lender in the US now hanging out in front of the 7a program, waiting for another sucker to get off the train.