The 90% Rule
April 9, 2014
If you have been following the SOP rule changes over the last few years you may have noticed this added: The SOP Adds language similar to that found in the appraisal section describing requirements when a lender requires business valuation at closing (valuation estimate in…
Liquidated Collateral Rules
March 16, 2014
SBA Tip # 7 The “Liquidated Collateral Rules” and how they affect your loan requestLiquidated Collateral Rules If you have been following the rule changes and tips each month you will remember that last month we talked about securing borrowers collateral when available. This month…
Secure All Available Collateral
February 19, 2014
The SBA lender “MUST” secure all available collateral up to fully secured. Actual SOP writing prior to January, 2014. This typically included all properties own by the borrower, all stocks and bonds along with life insurance cash values AND any additional cash accounts that are…
How Rental Income Can Help Your Deal
January 24, 2014
With most of the businesses we see these days having tighter cash flow in some previous years this is one of the ways we push them to the finish line. If they are including the CRE (Commercial Real Estate) in the transaction you should be…
How To Protect Investors/Partners
December 6, 2013
When the buyer needs additional down payment monies and brings in a partner, there are ways to protect them. The SBA requires any borrower (or owner in the new corp.) with a 20% or more ownership concern to personally guarantee the entire loan and pledge…
Seller Must Be Gone Within 12 Months
November 6, 2013
This rule comes up many times during the acquisition process and MUST be addressed prior to the loan submission to any lender. The actual rule states: The seller may not remain as an officer, director, stockholder or key employee of the business. (If a short…
Million Dollar Goodwill Cap
October 10, 2013
No such thing as a 1.2 million dollar goodwill cap on loans. There truly is no such thing as a goodwill maximum, as defined by SBA, and this is ALWAYS an individual lender policy. It is for this reason alone that we choose to share…
When Commercial Real Estate Is An Option
September 18, 2013
Why commercial real estate rules matter in your loan structuring. Actual SBA 7(a) Maturity Rule May use a blended maturity or a maturity up to the maximum for the asset class comprising the largest percentage of the use of proceeds. When loan proceeds are used for…
SBA 7(a) Acquisition Loans: Myth or Magic?
July 2, 2013
You hear about them all the time. My buyer secured an SBA loan and my seller walked away with all the money. Does that still happen in 2013? The answer may be right in front of you, and it may happen a lot more than…