One of the biggest advantages to offer SBA lender is the ability to work on and fund a special purpose properties. In general, and in this current credit crunch, funding commercial mortgage backed by end-use of properties no cake walk and many banks do not even look at these types of buildings.
Properties such as gas stations, motels and hotels, car washes, automotive repair, restaurants, heavy, etc. are just some of the best known examples. Owner seeking> Loans SBA lender can not achieve very conservative terms. 60% loan to value on purchases and 50% will be refinanced loan to value on the market.
In addition, regarding the possible conventional loans as restrictive. 5 years with 15 years of depreciation is usually set with a few exceptions to 20 years. The main problem with this shorter amortization periods is the impact on cash flow of the borrower. The difference in the monthly payment on a 15 years to 25 years isoften above 30%. Combine this with more conservative debt coverage ratios, that do not require SBA lender and you have a problem of not the minimum cash flow requirements.
SBA lenders with special application owners expect to hold 80% to 85% financing on purchases and if the transaction qualifies for a SBA 7a program on a refinance, 80% loan to value on a refinancing is still very much doable. Payback periods are often 25 years and can expect on the 504-program borrowers, competitiveRates on fixed-term programs. 7 set up 10 years is still present, for example.
Getting these loans closed in this market, although lighter than conventional is still difficult, and many of the most common complaints about the SBA are still valid. One of the biggest is the fee the SBA charges are not cheap. For example, borrowers can expect 2%, to 504 and 2.75% on the 7a program.
However, the borrowers have noted that all banks, funds, SBA loans are different.The bulk of the loan limits are not set by the banks and the SBA. For example, we work with a bank, often pays for the SBA charges enjoying themselves so the borrower a loan at no charge.
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