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Published byMeghan Lindsey Modified over 9 years ago
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Small Business Administration Created in 1953 to develop and aid small businesses in the U.S. Types of Financing Real Estate Franchises Inventory Accounts Receivable Equipment Business Acquisition Working Capital Refinancing
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SBA 7(a) SBA Express Small Loans (less than $350K) Large Loans (greater than $350K) Contract Line of Credit Program Loan Products
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Small Contractor LOC CAPline Revolving Line of Credit Export Working Capital Program International Trade Loan SBA 504 Program Loan Products cont.
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Contract Line Overview Loans are used to provide financing for assignable contracts or purchase orders Applicants must be able to demonstrate history of successful bidding & completion of contracts Maximum loan amount $5,000,000 PLP processing available
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For Profit & Not Dominant Retail less than $7-million in sales Wholesale less than 100 employees Manufacturing less than 500 employees Alternative Size Standard – Less than $5 million income after tax and $15 million net worth. Eligibility
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Contracts must be assignable Demonstrate managerial/technical ability in profitable bidding & completion of contracts Payment of purchase orders must be deposited into a controlled account Demonstrate prior prompt payments to suppliers & subcontractors Additional Eligibility
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Last 3 years business & personal tax returns Business F/S (> 180 days) Personal F/S (all principals < 20%) Personal and company debt schedule Cash flow projection for project to be financed Personal history & resume (all principals) Proposed contract or purchase order Application
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Use of Proceeds Proceeds can include 100% of the cost of labor & materials necessary to complete assignable contract or purchase order
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Establishing Loan Amount Single line may fund multiple projects without additional SBA approval Multiple projects must include projections showing borrowing need Must document labor & materials costs
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Up to 5 years for master note Loans to finance single transaction should be tied to project completion date Terms
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Maximum adjusting rate is Prime + 2.25 Can be fixed or variable – fixed rates can be higher rates Based on negotiation with lender SBA will allow interest rates to be increased for “excess” servicing Rates
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Assignment of contract being financed Lender is allowed to take additional collateral if available and necessary Collateral
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SBA charges a guarantee fee ranging between 2% to 3.875% on the guaranteed portion of the loan on loans over $150,000 For loans of less than 12-month the fee is ¼ of 1% Through December 31, 2016, Oklahoma legislation allows the lender to take a state income tax credit equal to the amount of the guarantee fee paid SBA Guarantee Fees
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Application/packaging fees allowed Credit Report & Filing Fees Borrowing Costs
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QUESTIONS?? Kent Faison BancFirst Commercial Capital 600 NW Fifth Street Moore, OK 73160 (405) 270-4733 kfaison@bancfirst.com
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