Buy A Home Before You Sell
Dually Licensed Mortgage Broker & RE Broker since 2005
NMLS #2431410 & CA DRE #01452367
The SBA 7(a) loan program is the Small Business Administration’s primary way of helping small businesses secure financing. These are the most common types of loans that the SBA guarantees, and the administration guarantees tens of thousands of them each year. While businesses must meet strict criteria to qualify, many small businesses — including many real estate businesses — are eligible for SBA 7(a) loans.
Eligible Properties: Office, Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage, Hotel/Motel
Loan amount range: Maximum of $5,000,000
Loan Term: Up to 25 years for commercial properties
Maximum LTV: 75% For Loans Over $150,000
Minimum DSCR: 1.25x
Prepayment: For loans with maturities of 15 years or more if prepaid during the first 3 years. (5% year 1, 3% year 2 and 1% year 3)
Guaranty Fees: Above $700,000=3.5% up to the 1st million: plus .25% on guaranty portion over $1 million.
Collateral: SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount on loans over $350,000. Personal guarantees are required for owners that have a 20% or more stake in the business
SBA 504 loans help businesses grow and create jobs by offering small businesses an avenue for affordable business financing. Through the 504 loan program, small businesses have access to long-term, fixed-rate financing, which they can use to expand or modernize their business.
- Eligible Properties: Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage, Hotel/Motel, Restaurants, Daycare facilities, Assisted Living,
Loan amount range: Up to $5 million or $5.5 for manufactures and energy-efficient projects
Interest Rate: Pegged to an increment above the current market rate for 5-year and 10-year US treasury issues.
Loan Term: 10 or 20 years
Amortization: 10 to 30 years
Maximum LTV: Up to 90% LTV. Hospitality is limited to 85%
Minimum DSCR: 1.20x
Minimum Debt Yield: 7-8%
Recourse: Full recourse.
Prepayment: Prepayment penalty declines during the first 10 years to 0%. The loan is assumable and the prepayment penalty does not apply.
Collateral: The project assets that are being financed are used as collateral. The principal owners are required to produce personal guarantees.
Vashon Mortgage – NMLS #2431410 & Collen & Associates CA DRE #01452367
WA DFI Consumer Loan License #2431410 & California DRE Broker License #01452367
(c) 2022 – All rights reserved
Randal Collen, dually licensed RE professional – MLO #2386273 & DRE #01452367
PO Box 452, Vashon WA 98070.