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After receiving your application, we perform an internal credit analysis. This credit analysis is the method by which we calculate the creditworthiness of you as a borrower and the creditworthiness of your business. The owner must qualify as a grantor and the business must qualify as viable. A review of your personal and business credit scores, capacity, capital, collateral, conditions, and character along with any criminal background checks, liens, judgements, collections and outstanding debts is also used to determine your creditworthiness.
Meeting the banks eligibility requirements can be daunting for most clients. It’s why business owners turn to us for the technical assistance they need before their application is submitted to the bank. We’ll advise you then match you with the trusted lenders in our network most likely to ”Approve” your application.
This credit analysis does not guarantee that a bank in our network will extend you a loan.
The SBA sets the guidelines that govern the 7(a) loan program. As a lender, these conditions determine which businesses you can lend to and the type of loans you can give.
The specific terms of SBA loans are negotiated between the borrower and the participating lender, subject to the requirements of the SBA. In general, the following provisions apply to all SBA 7(a) loans.
Most 7(a) loans have a maximum loan amount of $5 million. However, SBA Express loans have a maximum loan amount of $350,000. SBA Export Express loans have a maximum loan amount of $500,000.
The SBA's maximum exposure is $3.75 million ($4.5 million under the International Trade loan). If a business receives an SBA-guaranteed loan for $5 million, the maximum guaranty to the lender will be $3.75 million, or 75 percent. The guaranty percentage varies depending on the loan amount and program type.
SBA loan programs are generally intended to encourage longer-term small business financing. Loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed.
The maximum maturities for SBA loans are as follows:
The maximum maturity of loans used to finance fixed assets other than real estate will be limited to the economic life of those assets, in no instance to exceed 25 years. The 25-year maximum will generally apply to the acquisition and/or improvements of land and buildings or the refinancing of debt incurred in their acquisition. Where business premises are to be constructed or significantly renovated, the 25-year maximum would be in addition to the time needed to complete construction. (Significant renovation means construction of at least one-third of the current value of the property.)
When loan proceeds will be used for a combination of purposes, the maximum maturity can be a blended maturity based on the use of proceeds or up to the maximum for the asset class comprising the largest percentage of the use of proceeds.
Interest rates are negotiated between the borrower and the lender, but are subject to SBA maximums, which are pegged to the prime rate, the LIBOR rate, or an optional peg rate. Interest rates may be fixed or variable.
Variable rate loans may be pegged to the lowest prime rate, the LIBOR Rate, or the SBA optional peg rate. The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan. It is calculated quarterly and published in the Federal Register. The lender and the borrower negotiate the amount of the spread, which will be added to the base rate. An adjustment period is selected which will identify the frequency at which the note rate will change. It must not be more often than monthly and it must be consistent (e.g., monthly, quarterly, semiannually, annually, or any other defined period). The maximum rate for SBA Express and Export Express loans is Prime + 6.5 for loans of $50,000 or less. For loans of over $50,000, it is Prime + 4.5.
For most 7(a) loan programs, the SBA can guarantee up to 85 percent of loans of $150,000 or less, and up to 75 percent of loans above $150,000. However, SBA Express loans carry a maximum of 50 percent guaranty and Export Express loans carry a maximum 90 percent guaranty. The Export Working Capital loan program and International Trade loans carry a maximum of 90 percent guaranty, up to a guaranteed amount of $4.5 million.
SBA loans offered by banks in the FinTech Capital Management lending network have variable interest rates of Prime Rate plus 2.75% to 3.75%. Fixed rate term loans offered by banks in the FinTech Capital Management lending network have fixed interest rates between 2.75% to 3.75%. Monthly payment, fees and Annual Percentage Rate (APR) are estimates and may vary. APR includes fees whereas interest rate does not. Besides closing costs, banks in the FinTech Capital Management network typically charge a one-time packaging fee for loans. FinTech Capital Management may charge the small business applicant additional fees for loan technical assistance. The SBA may also charge a guarantee fee up to 2.25% of the loan amount for SBA loans. For fixed rate term loans, banks in the FinTech Capital Management network typically do charge packaging fees. FinTech Capital Management does charge fees of up to 6% of the loan amount for non-SBA Term loans offered by banks in the FinTech Capital Management lending network. Fees are an estimate and the actual amounts may vary. Fees and closing costs will be deducted from loan proceeds at time of funding. SBA loans offered by banks in the FinTech Capital Management lending network do not have prepayment penalties—you can pay off the loan at any time.
Note 1: The SBA specifies the amount of certain fees each fiscal year for all loans approved during that year.
Note 2: For example, the guaranty fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the lender may retain $425.
Note 3: For example, the guaranty fee on a $5,000,000 loan with a 75% guaranty (3.75 million guaranteed portion) would be 3.5% of $1,000,000 ($35,000) plus 3.75% of $2,750,000 ($103,125) with totals $138,125.
Processing fees, origination fees, application fees, points, brokerage fees, bonus points, and other fees that could be charged to an SBA loan applicant are prohibited. The only time a commitment fee may be charged is for a loan made under the Export Working Capital loan program.
For loans with a maturity of 15 years or longer, prepayment penalties apply when:
The prepayment fee is as follows:
While the vast majority of businesses are eligible for financial assistance from the SBA, some are not.
Eligible businesses must:
Special considerations apply to some types of businesses and individuals.
Franchises are eligible, except in situations where a franchisor retains power to control operations to such an extent as to be tantamount to an employment contract. The franchisee must have the right to profit from efforts commensurate with ownership.
Recreational facilities and clubs are eligible provided: (a) the facilities are open to the general public, or (b) in membership-only situations, membership is not selectively denied to any particular group of individuals, and the number of memberships is not restricted either as a whole or by establishing maximum limits for particular groups.
Farms and agricultural businesses are eligible; however, these applicants should first explore the Farm Service Agency (FSA) programs, particularly if the applicant has a prior or existing relationship with FSA.
Fishing vessels are eligible. However, those seeking funds for the construction or reconditioning of vessels with a cargo capacity of five tons or more must first request financing from the National Marine Fisheries Service (NMFS), a part of the U.S. Commerce Department.
Medical facilities such as hospitals, clinics, emergency outpatient facilities, and medical and dental laboratories are eligible. Convalescent and nursing homes are eligible, provided they are licensed by the appropriate government agency and services rendered go beyond those of room and board.
An Eligible Passive Company (EPC) is a small entity that does not engage in regular and continuous business activity. An EPC must use loan proceeds to acquire or lease, and/or improve or renovate real or personal property that it leases to one or more Operating Companies for conducting the Operating Company's business. The EPC must comply with the conditions set forth in 13 CFR Sec 120.111.
Change of ownership. Loans for this purpose are eligible provided the business benefits from the change. In most cases, this benefit should be seen in promoting the sound development of the business or, perhaps, in preserving its existence. Loans cannot be made when proceeds would enable a borrower to purchase: (a) part of a business in which it has no present interest or (b) part of an interest of a present and continuing owner. Loans to effect a change of ownership among members of the same family are discouraged.
Legal aliens are eligible. However, consideration is given to the type of status possessed (e.g., resident, lawful temporary resident, etc.) in determining the degree of risk relating to the continuity of the applicant's business. Excessive risk may be offset by full collateralization. The various types of visas may be discussed in more detail with the local SBA office. Use USCIS Form G-85 for verification of citizenship.
Probation or parole. Applications will not be accepted from firms where a principal (any one of those required to submit a personal history statement, SBA Form 912) is currently incarcerated, on parole, or on probation; is a defendant in a criminal proceeding; or whose probation or parole is lifted expressly because it prohibits an SBA loan. This restriction would not necessarily preclude a loan to a business where a principal had responded in the affirmative to any one of the questions on the Statement of Personal History. These judgments are made on a case-by-case evaluation of the nature, frequency, and timing of the offenses. Fingerprint cards (available from the local SBA office) are required any time a question on the form is answered in the affirmative.
Ineligible businesses include those engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole.
Specific types of businesses not eligible include:
Real estate investment firms, when the real property will be held for investment purposes as opposed to loans to otherwise eligible small business concerns for the purpose of occupying the real estate being acquired.
Firms involved in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade, such as wildcatting for oil and dealing in commodities futures, when not part of the regular activities of the business.
Dealers of rare coins and stamps are not eligible.
Firms involved in lending activities, such as banks, finance companies, factors, leasing companies, insurance companies (not agents), and any other firm whose stock in trade is money.
Pyramid sales plans, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants. Such products as cosmetics, household goods, and other soft goods lend themselves to this type of business.
Firms involved in illegal activities that are against the law in the jurisdiction where the business is located. Included in these activities are the production, servicing, or distribution of otherwise legal products that are to be used in connection with an illegal activity, such as selling drug paraphernalia or operating a motel that permits illegal prostitution.
Gambling activities, including any business whose principal activity is gambling. While this precludes loans to racetracks, casinos, and similar enterprises, the rule does not restrict loans to otherwise eligible businesses, which obtain less than one-third of their annual gross income from either the sale of official state lottery tickets under a state license, or legal gambling activities licensed and supervised by a state authority.
Charitable, religious, or other non-profit or eleemosynary institutions, government-owned corporations, consumer and marketing cooperatives, and churches and organizations promoting religious objectives are not eligible.
Return Policy: There will be no refunds for any reason. All services sold by FinTech Capital Management is sold as-is without any guarantee. By making a purchase with FinTech Capital Management, you are confirming that you have read and understand our no refund policy.
You further agree that the products and services rendered have been delivered to you satisfaction and any chargeback will be reversed.
Commercial loan brokers act as a matchmaker for lenders and businesses who have been denied a traditional loan. A loan broker is often the last resort for businesses in need of funding and the loan broker needs to be ready to provide that funding. Every day is different, but most loan brokers will experience certain constants in their daily business.
Once all of this information is collected, it is time to figure out the best loan type for the client. The loan amount required and the loan-to-value ratio will help the loan broker and the client to determine the best funding options. The client may have already researched the different loan types and may already have an idea of what they require, making this part of the process much faster. Much more often, the broker is responsible for determining the most appropriate type of financing for each client’s individual needs.
LOAN BROKERS SHOP AROUND
The loan broker will use the information gathered from the client to match them with the best financing options through a pool of lenders. Many lenders will only fund certain types or sizes of business. It is the loan broker’s job to locate the best lender and the best rates for the client’s needs. Loan brokers have access to a variety of lenders and the lenders that one broker works with will likely be different than another loan broker’s lending pool. Clients will often ask for quotes from multiple lenders. The more options, the better.
Loan brokers spend a lot of time counseling and assisting business owners to understand their financing options. Great loan brokers are willing and able to provide clients with as much information on the loan process and their available options as possible. By being a source of valuable knowledge, brokers cement their trust with clients and build long term relationships.
Every client and every deal is different than the last. No two loans are ever the same and commercial loan brokers are prepared to locate funding for every scenario. From the beginning stages of on-boarding to the final stages of funding and payment, loan brokers are experts building trusting relationships with clients, bankers, lenders and investors.
Come experience the FinTech Capital Management difference. We close SBA 7(a) deals that major banks can’t, working with a range of credit scores and financing challenges nationwide.
FINTECH CAPITAL MANAGEMENT
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