SBA Lending

As low as 10% down payment requirement
Long repayment terms (25 years)
Fixed rate for the terms of the SBA loan
As low as 10% down payment requirement
Additional collateral is typically not required

SBA 504 loans finance 40 percent of the total purchase. The bank provides 50 percent of the project the business contributes the 10 percent down payment. As an example, if the purchase price is $1,000,000, the following would be the loan structure:

Bank 1st mortgage – $500,000
SBA 2nd trust deed – $400,000
Business down payment – $100,000

On the SBA loan there is a declining prepayment penalty for the first 10 years of the loan, typically tied to the initial interest rate. The bank loan usually has a prepayment penalty depending on the structure of the loan.

Yes, “soft costs” (e.g. appraisals, environmental, construction interest, closing costs) also can be financed in the 504 loan, allowing the small business to preserve working capital.

The SBA defines the small business as having tangible net worth which must be less than $15 million. After-tax net profit must be $5 million or less, on average, for the prior two years.

The business must occupy 51% of an existing building within 12 months or 60% if constructing a new facility.

Long-term machinery and equipment with a useful life greater than 10 years (e.g., a printing press).

Lower down payment requirements, as low as 15%
Longer repayment terms (25 years)
Shorter pre-payment penalties
More aggressive underwriting, projected income is considered now just historical cash flows
As a preferred lender, PB Capital makes the final decision on approval

A 7(a) purchase of office, retail or industrial buildings would require a minimum 15% down payment, the balance financed by a SBA 7(a) loan is for example if the building purchase price is $1,000,000 the following would be the loan structure:

Bank 1st mortgage – $850,000
Borrower down payment – $150,000

There is a declining 3 year prepayment penalty.
5% year one
3% year two
1% year three
No prepayment penalties to follow for the life of the loan.

Absolutely, in addition to soft costs (e.g. appraisals, environmental, interim interest, and other closing costs) we can include working capital, equipment financing and other eligible use of proceeds.

The business tangible net worth must be less than $15 million. After-tax net profit must be $5 million or less, on average, for the prior two years.

The business must occupy 51% of an existing building purchase or 60% if constructing a new facility.