SBA Lending

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SBA Lending

Important New Changes to SBA 7(a) and 504 Loans For 2021

The Economic Aid Act passed on December 27, 2020, made a number of attractive, limited-time benefits available to SBA 7(a) and 504
borrowers. As an SBA Preferred Lender, we are highly qualified to help businesses in our communities quickly and seamlessly take advantage of this opportunity for much needed financing.

Changes to the programs are highlighted below. Please contact your local business banking or commercial relationship manager for complete details and to see if an SBA loan is right for your business.

Highlights of the SBA 7(a) lending program and its changes:

SBA Guaranty Fee Temporarily Waived
Subject to the availability of funds, beginning 12/27/2020 through 9/30/2021 for all 7(a) loans the SBA Guaranty Fee is reduced to zero for new loans approved.

SBA Express Loan Amounts Increased
Maximum Loan Amount: The current $1,000,000 maximum loan is extended through 9/30/2021. On 10/1/2021, the maximum loan amount will permanently change to $500,000.

Monthly Payment Cap
SBA 7(a) loans approved between 2/1/2021 and 9/30/2021 will receive three months of payments capped at $9,000
per month (limited to one loan per borrower). Borrowers who have an existing SBA loan/s that are currently receiving subsidy payments are not eligible to receive subsidy payments on a new SBA loan originated during this time frame.

Highlights of the SBA 504 lending program and its changes:

SBA 504 loans can be used for expansion or modernization of long-term, fixed assets, usually real estate or large equipment. Refinancing of large equipment and/or owner-occupied commercial real estate may also be possible. These loans are provided by Certified Development Companies (CDCs), nonprofit economic development corporations, with the help of third-party lenders, like First Natioanl 1870.

Borrower-Paid CDC Processing Fee Temporarily Waived
Subject to the availability of funds, beginning 12/27/2020 through 9/30/2021, the borrower will not be responsible for the 1.5% processing fee of net debenture proceeds that is paid to its CDC. The SBA will reimburse CDCs for the waived processing fees.

Third-Party Lender Participation Fee Temporarily Waived
Subject to the availability of funds, beginning 12/27/2020 through 9/30/2021, the SBA has eliminated the 0.5% participation fee for the participation of a bank lender in a 504 loan.

Limited-Time Use of 504 Loans for Cash-Out Refinancing
Until 12/27/2021, the SBA allows a cash-out refinance for existing 504 borrowers. Funds received from the cash-out refinance must be injected back into the operating company. Leverage on the refinanced loan is up to 90% of the total original loan balance (combining both the refinanced senior debt and the outstanding balance of existing 504 loan).


SBA Preferred Lending


As a US Small Business Administration Preferred Lender, we have a streamlined, in-house approval process and dedicated specialists that work with our local teams to provide timely credit approvals driven by local expertise. Being a designated SBA Preferred Lender means we have been recognized for our successful track record, high SBA loan volume, and expertise in SBA lending policies and procedures. Let us help you determine if an SBA loan is the best structure to help achieve your business goals.

We believe in the importance of educating on the potential of SBA Lending. Most business owners don’t realize that while SBA loans can be a beneficial option for new businesses, SBA loans are primarily used to help finance mature, strong, and growing companies. Today SBA loans are one of the fastest growing financial products and are being used by some of the most sophisticated and flourishing businesses.

Using an SBA loan allows qualified businesses to access longer repayment timelines, more flexible terms, and lower down payments. The lower monthly payments created by these options can help reserve cash to pay for growth initiatives such as hiring more employees, R&D, capital expenditures, or purchasing equipment and real estate.

First National 1870 offers SBA loans for business acquisition, owner-occupied commercial real estate, equipment financing, and working capital, as well as a special suite of programs for companies involved in international trade and export.

Real Estate

With every business decision it is important to consider your options and understand your choices. For business owners, deciding whether to buy or rent your location can have a significant impact on your financial situation. If you are looking to buy, build or renovate commercial real estate for your business, an SBA loan may be right for you. We will provide you with a comparison of conventional, SBA 7(a), and SBA 504 options. This analysis includes down payment requirements, amortization options, interest rates, estimated fees, and monthly payments, so that you have a complete picture of how to make the most out of your real estate investment.

Business Acquisition and Partner Buyouts

SBA loans are the most common type of financing used nationwide by individuals looking to purchase an existing business or buy out a partner. SBA business acquisition loans are designed for buyers with significant management experience and relevant industry knowledge who are acquiring 100% ownership of a business. Advantages over conventional loans include a longer repayment term and a lower down payment. Acquisition loans may be structured to include the purchase of commercial real estate and a line of credit to help fund accounts receivable and inventory.


Export Trade

While your business may be based in our community, your suppliers and customers can be anywhere in the world. We’re here to help our local companies effectively compete in the global marketplace. That is why we are pleased to provide businesses that conduct international trade with access to the US Small Business Administration’s international trade programs and resources. These specialized programs have unique terms and eligibility requirements based on the borrower’s profile and need.  We will work with you to determine the program that best meets your needs:

  • Export Working Capital Program - The Export Working Capital Program of the SBA is a revolving line of credit designed to provide temporary working capital for businesses involved in exporting goods outside the United States.
  • International Trade Loan (ITL) - The ITL is a term loan designed to help small businesses enter and expand into international markets.
  • Export Express Program - The Export Express Program is a revolving line of credit similar to the Export Working Capital Program. For Export Express loans, we have been delegated approval authority by the SBA for lines up to $500,000, which speeds up the underwriting process.

 

Creating Possibility is what we do.
Contact your relationship manager or an SBA specialist to see how we can help.
 
Matthew Mapes
SVP, Director of SBA Market Development
Matthew.Mapes@SunflowerBank.com
480.676.6619
 
Ryan Goral
VP, SBA Business Development Officer
Ryan.Goral@SunflowerBank.com
303.831.6725