SBA 7(a) Business Acquisition Loan Series - Seller Discretionary Earnings | My SBA Loan Pro Podcast posted on the topic | LinkedIn (2024)

SBA 7(a) & 504 Real Estate Purchase Loan Application From Start To FundingThe most frequently asked question I receive by far is how long does the loan application process take to complete from start to finish. The quick answer is 45 - 60 days. The honest answer is it takes as long as necessary to complete all steps in the process.The next logical question is what are the steps. Here is a list of each step in order with an explanation.Before I begin, I want to emphasize the timeline starts from the day the lender receives the monetary Deposit, usually $2,500 or $5,000 and the signed Letter of Interest or Term Sheet.Step 1: Loan Application Needs List. This needs list is sent to the Applicant by the Lender in preparation for underwriting. Included are General Application Forms and SBA Forms 1919, 413 and 912 if necessary. It typically takes 2 - 4 days for the lender to generate this needs list from receipt of the monetary Deposit and signed Letter of Interest.Step 2: Underwriting. The amount of time to underwrite the loan is 1 - 3 weeks depending on the lender's pipeline density, available underwriters and support resources and outstanding information required by the underwriter to render a decision.Step 3: Credit Decision. The credit decision is announced upon completion of underwriting or the conclusion of ”loan committee.” Some lenders shepherd loan requests through individual underwriters in an underwriting loan center. Other lenders maintain a decision making body referred to as “loan committee.” It takes 5 - 10 days for an underwriter to review a loan application and either return to the applicant with questions or a credit decision, meaning the loan is either approved or declined. Loan committees decide a loan in the committee meeting which is typically held one day per week or every other week.SBA 504 loan requests require a separate SBA Approval called an Authorization which may add an additional 5 - 10 days to the entire application process.Step 4: Commitment Letter. The commitment Letter outlines conditions required to close the loan and is sent to the Applicant 2 - 4 days after loan approval. This step begins the process of ordering third party reports and the collection of closing documents.Step 5: Third Party Reports & Closing Documents. A real estate appraisal is ordered by the lender to be performed by an SBA approved third party appraisal company. The appraisal may take 2 - 3 weeks to complete with an additional 2 - 5 days for lender review. If a business acquisition is included with the real estate purchase, a business valuation is also ordered which also takes 2 - 3 weeks with an additional 2 - 5 days for lender review.

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SBA 7(a) Business Acquisition Loan Application From Start To FundingThe most frequently asked question I receive by far is how long does the loan application process take to complete from start to finish. The quick answer is 45 - 60 days. The honest answer is it takes as long as necessary to complete all steps in the process.The next logical question is what are the steps. Here is a list of each step in order with an explanation.Before I begin, I want to emphasize the timeline starts from the day the lender receives the monetary Deposit, usually $2,500 or $5,000 and the signed Letter of Interest or Term Sheet.Listen to more episodes 🎧▶ https://mysbaloanpro.com▶ https://mysba.pro/applepod▶ https://lnkd.in/gfNS8PHW

ThinkSBA Small Business SBA Loan ExpertsApplying for a small business loan can be stressful, grueling and confusing when you hear the dreaded NO from your bank. Does this sound familiar?Hello, my name is Ryan Smith, Principal Broker and Founder of ThinkSBA.If you are listening to this podcast it’s likely you are a small business owner or entrepreneur who is purchasing real estate, acquiring a business or franchise or are in need of working capital to grow or start your business.If this describes you, you’re in the right place.I started ThinkSBA because, as a former banker, I was tired of saying no to good people with good businesses. And now I don’t have to.That’s because I’m not constrained by one bank or one credit platform. I work with local, regional and nationwide lenders to find the loan that meets your unique business demands.My process is simple, yet effective.First, I get to know you, your company and business goals.Second, I conduct a thorough financial analysis to determine which lenders are the best fit.Third, I engage the lenders, receive proposals, and then you choose which lender funds your loan. Don’t worry, I am with you every step of the way.And just like that, I’ve put the power to determine your company’s financial future back into your hands.The best part, the majority of the time I am paid by the lender, not you.Yes, it can be that simple with your cooperation and my years of experience leading the way.If you’re ready to discuss your purchase or acquisition visit the ThinkSBA website athttp://thinksba.comand click the Get Started button in the top right hand corner of the homepage.If you’re not quite ready but want to learn more about SBA guaranteed loans, feel free to browse the My SBA Loan Pro podcast library and please remember to subscribe and leave a review.Have a great day!Listen to more episodes 🎧▶https://mysbaloanpro.com▶https://mysba.pro/applepod▶https://lnkd.in/gtTVi-yT

Demystifying The SBA Loan Application - Crossing The Finish Line!The most important step in the SBA loan application process is closing the loan. This is obvious, right? You would think so. However, many applicants make the mistake of focusing their attention on closing after it’s too late, and they've missed a critical step or piece of information that inevitably prevents them from closing the loan.An SBA loan is considered closed after a loan number has been assigned by the bank and boarded to their loan management platform, applicant and bank funds have been moved into escrow or a construction account, deeds of trust have been recorded and/or licenses obtained and escrow finally and formally notifies all parties its job is finished.Unfortunately, many SBA loan applications never close. This is extremely frustrating for the applicant who has invested time, money and other precious resources with nothing to show for it. No new business, no new office building, no working capital. I know this because many applicants who are referred to me or find me on Google have personally experienced this frustration first hand.Reasons for the loan application stalling out prior to close include inadequate bookkeeping and financial reporting, improper legal entity documentation and structure, applicant non-disclosure of prior adverse credit, criminal background or other malfeasance, insufficient asset value resulting from a real estate appraisal or business valuation, discovery of soil or water contamination from a Phase 1 environmental report, ineligible business applicant, individual guarantor or purchase contract, inability to obtain proper licenses and certifications and/or uncooperative and unreasonable partners, sellers, contractors or landlords and the list goes on.The good news is there is a tried and true method to successfully close an SBA loan and avoid the frustration of watching your hopes and dreams disintegrate into thin air.

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The Benefits of Hiring an SBA Small Business Loan BrokerNavigating the SBA loan program and application process can be complicated.For starters, the entire SBA loan program, including borrower eligibility requirements and all policies and procedures, is governed by the SBA’s Standard Operating Procedures Manual also known as the SOP for short.The SOP is a 400 page document filled with industry jargon and references. To make matters worse, it is regularly updated making it nearly impossible for an applicant to know everything necessary to successfully apply for an SBA loan on their own.This begs the question, “Where should an applicant turn to prepare themselves to successfully apply for an SBA loan without wasting time, money and other precious resources?Many applicants simply turn to their incumbent Bank. The benefits of working with an incumbent bank include familiarity, trust and rapport. The potential negatives include; the bank not being a respected SBA Lender, the bank not being the right fit; which may result in a bad experience or even worse a credit decline, and the bank not offering the lowest rates and fees for which the applicant qualifies.An alternative many applicants choose is asking for lender referrals from their trusted advisor network. This option amounts to a crap shoot as most trusted advisors have little to no familiarity with the ins and outs of SBA lending.The third option is hiring a trusted SBA Small Business Loan Broker. Many consumers are comfortable hiring a residential mortgage loan broker to finance the purchase or refinance of their primary residence and it should be the same for business owners and entrepreneurs who are in need of financing to purchase or refinance their owner user real estate and/or acquire a business.The benefits of hiring an SBA loan broker include:Working with an expert who is proficient in the details of SBA financingBeing matched with the right SBA lender from the startHaving a trusted advisor who is on your team and can answer questions or give advice through the entire application process from start to fundingI want to warn you that not all loan brokers are created equal. Beware of any loan broker who doesn’t focus primarily on SBA loans, requires fees to be paid upfront, is not properly licensed, makes unsubstantiated guarantees or promises regarding interest rates and loan approval, and anyone who advises and/or encourages unlawful actions to get the deal done at any cost.

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Dive into the world of SBA Lending with the My SBA Loan Pro Podcast, where Ryan Smith, our Host and Founder of ThinkSBA Interviews top SBA adjacent service providers unpacking SBA eligibility and qualification guidelines.Subscribe now on YouTube for expert insights, tips, and best practices to navigate the SBA loan process like a Pro. https://lnkd.in/gErvjzax

The Science of SBA Loan ApprovalAre you a business owner or entrepreneur applying for an SBA loan or planning to in the near future? If your answer is yes, then keep listening because this podcast was recorded specifically for you.In this podcast I reveal the science of obtaining SBA loan approval. That’s right, being approved for an SBA loan is a science and is based on the following five fundamentals.The first fundamental is Experience, the second Liquidity, the third Personal Credit History, the fourth Cash Flow and the fifth Credibility.Listen to more episodes 🎧▶ https://mysbaloanpro.com▶ https://mysba.pro/applepod▶ https://lnkd.in/g_dJ3i2d

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Are you contemplating or currently applying for an SBA Loan to purchase owner occupied real estate, acquire a business or franchise or buy-out a partner?Are you searching for a reputable source for current and reliable tips and best practices to guide you through the loan application process?Congratulations! Your search is over. Subscribe to the ThinkSBA Insider Newsletter today and apply like a Pro!💡https://lnkd.in/gGrEq92J

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Why The SBA 7(a) Loan Program Is The Best Financing Option To Buy-Out A PartnerBusiness succession planning is vital to the longevity of any business. This is especially true when a business is owned by two or more individuals, for seldom do business partners share the same retirement and life goals.Therefore, a business is most likely to experience an interruption or even worse, the ceasing of operations altogether, when one partner is ready to exit the business and the others are not. This matter is further complicated when the partnership also owns both the business and the real estate from which the business operates.Possible scenarios, when one partner is ready to exit and the others are not, include a private loan from the partner exiting the business to the remaining partners, an earn-out for the benefit of the partner exiting the business paid out over several years or a venture capital non-bank funding source. These funding sources are often expensive and complicated.None of these scenarios likely meet the goals of all parties involved.On the other hand, if a partner buy-out is structured correctly, the SBA 7(a) loan program is perfectly suited to meet the goals of both the partner exiting the business and the remaining partners.The partner exiting the business is able to receive full payment for their equity ownership and therefore enjoy retirement by dropping all involvement in the business.The partners remaining in the business take 100% control with no cash out of pocket as long as the business balance sheets for the most recently completed fiscal year and current quarter reflect a debt-to-worth ratio of no greater than 9:1 prior to the change in ownership.Other benefits of the SBA 7(a) loan program include:SBA loan interest rates are competitive with conventional ratesSBA guarantee fees may be financed instead of paid out of pocket preserving precious operating capitalThe loan is amortized over a 10 year periodThere is no prepayment penaltyThere are no financial covenants or burdensome annual documentation review requirementsWhen the real estate is owned by all partners and included in sale, there is the ability for the partners remaining in the business to combine the partner buy-out with the real estate purchase into one loan amortized over a 25 year period

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