SBA AND USDA LOANS
The Government insured loan programs have very specific guidelines that must be followed. WNC acts as a “marketing and packaging partner” for a number of “SBA Preferred Lenders” that have the ability to underwrite loans in house.
SBA 7(a ) Loans
Transaction Guidelines
| Minimum Loan Amount | Varies by Lender but few lenders will entertain loans under $100,000 |
| Maximum Loan Amount: | $5,000,000 |
| Acceptable Loan Purposes: | Purchase new property including construction costs |
| Repairs/Renovations to existing facilities | |
| Purchase or expand an existing business | |
| Refinance existing debt (Limitations exist) | |
| Purchase equipment, machinery, furniture, fixtures, supplies, or materials | |
| Working Capital | |
| Minimum Equity Injection: | Minimum of 10% but generally 20% ( Up to the discretion of the lender) |
| Minimum Debt Service Coverage | 1.25/1 |
| Maximum Business Size | Business net worth cannot exceed $15 million |
| Personal Guarantee’s: | Required on every owner of 10% or greater or owners of less than 10% with significant operating role |
| Minimum Credit Scores of Guarantors: | Varies by Lender but above 640 |
| Related Management Experience: | Required |
| Interest Rate Structures: | Can be fixed but usually quarterly adjustable tied to WSJ Prime. |
| Amortization Period: | Up to 25 years based on the loan purpose |
| Other Restrictions | |
| Time to Close: | 45-90 days |
SBA 504 Loans
Transaction Guidelines
| Minimum Loan Amount | Varies by Lender but few Lenders will entertain loans under $100,000 |
| Maximum Loan Amount: | $5,000,000 |
| Acceptable Loan Purposes: | Purchase of real estate and facilities |
| Construction of new facility including soft costs | |
| Refinance of existing debt | |
| Purchase of furniture, equipment and machinery | |
| Purchase of a business | |
| Renovation of facilities including soft costs | |
| Minimum Equity Injection: | Minimum of 10% ( Up to the discretion of the lender) |
| Minimum Debt Service Coverage | 1.25/1 |
| Maximum Business Size | Business net worth cannot exceed $15 million |
| Personal Guarantee’s: | Required on every owner of 10% or greater or owners of less than 10% with significant operating role |
| Minimum Credit Scores of Guarantors: | Varies by Lender but above 640 unless smaller loan/then possibly down to 620 |
| Related Management Experience: | Required |
| Interest Rate Structures: | Fixed rate loan |
| Amortization Period: | Up to 25 years |
| Other Restrictions | |
| Time to Close: | 45-90 days |
USDA Business and Industrial Loans
Transaction Guidelines
| Minimum Loan Amount | $1,000,000 |
| Maximum Loan Amount: | $20,000,000 |
| Acceptable Loan Purposes: | Business conversion enlargement, repair, modernization, or development |
| Purchase and development of land, easements, rights-of-way, buildings or facilities | |
| Purchase of equipment, leasehold improvements, machinery, supplies or inventory | |
| Debt refinancing when refinancing improves cash flow and creates or saves jobs | |
| Business and industrial acquisitions when the loan will create or save jobs | |
| Minimum Equity Injection: | 20% for real estate 30% for equipment 40% for inventory and accounts receivable |
| Minimum Debt Service Coverage | |
| Borrower Entity Type: | “For profit” entities, “Nonprofits Corporations”, Individuals |
| Maximum Business Size | No maximum |
| Personal Guarante’s: | Required on every owner of 20% or greater or owners of less than 20% with significant operating role |
| Minimum Credit Scores of Guarantors: | Must have “good credit” (Lender has some discretion but generally 680 or above) |
| Related Management Experience: | Required |
| Interest Rate Structures: | May be fixed or quarterly adjustable |
| Amortization Period: | Up to 30 years for real estate Up to 15 years for machinery and equipment Up to 7 years for working capital (Must be fully amortizing) |
| Other Restrictions | Must be in a rural area based on zip code ( Populations of less than 50,000 and urban areas) |
| Time to Close: | 60-90 days |
Our Process
The process is dependent upon the lender but it will generally follows the process below:
Initial Contact/Referral of Transaction– Whether we are contacted by the applicant or through a referral partner, we require an initial call with the prospective applicant to better understand the transaction. When a referral partner is involved, we keep the referral partner abreast of the status but we need to work directly with the applicant.
Eligibility Determination– One we obtain the Registration, we determine what initial documents are required for eligibility determination and submit Eligibility Determination Request Form with those documents to our lenders for them to determine if they will entertain an application and the general terms they would offer.
Indication of Interest/ Execution of Fee Agreement– Once we have received an agreement from one or more lenders to accept the application and an estimate of terms, we send out a written Indication of Interest along with our Fee Agreement for acceptance and execution by the applicant. Please note the fees earned by WNC are paid at closing.
Document Checklist– Once we have received the executed Fee Agreement, we will send the applicant a Documentation Checklist and any lender or loan specific forms which will outline what is needed to submit the loan application for approval. In some cases we will submit the application to multiple Lenders for approval.
Conditional Approval/Terms Sheet– Most Lenders will issue a Conditional Approval with terms or a Terms Sheet. The applicant will be required to “Accept” the terms and most lenders then require payment of the fee for the Property Appraisal. The cost of this appraisal will vary based on the property.
Clear to Close/Closing of Loan – Once all conditions have been cleared including a satisfactory appraisal, the loan is then scheduled to close. Each lender is different but at some point, each Lender will take charge of the loan and communicate directly with the applicant.
(WNC and its referral partners are paid for our services by the lenders)
Our Process
The process is dependent upon the lender but it will generally follow the process below:
Initial Contact/Referral of Transaction– Whether we are contacted by the applicant or through a referral partner, we require an initial call with the prospective applicant to better understand the transaction. When a referral partner is involved, we keep the referral partner abreast of the status but we need to work directly with the applicant.
Eligibility Determination– One we obtain the Registration, we determine what initial documents are required for eligibility determination and submit Eligibility Determination Request Form with those documents to our lenders for them to determine if they will entertain an application and the general terms they would offer.
Indication of Interest/ Execution of Fee Agreement– Once we have received an agreement from one or more lenders to accept the application and an estimate of terms, we send out a written Indication of Interest along with our Fee Agreement for acceptance and execution by the applicant. Please note the fees earned by WNC are paid at closing.
Document Checklist– Once we have received the executed Fee Agreement, we will send the applicant a Documentation Checklist and any lender or loan specific forms which will outline what is needed to submit the loan application for approval. In some cases we will submit the application to multiple lenders for approval.
Conditional Approval/Terms Sheet– Most Lenders will issue a Conditional Approval with terms or a Terms Sheet. The applicant will be required to “Accept” the terms and most lenders then require payment of the fee for the Property Appraisal. The cost of this Appraisal will vary based on the property.
Clear to Close/Closing of Loan – Once all conditions have been cleared including a satisfactory appraisal, the loan is then scheduled to close. Each lender is different but at some point, each lender will take charge of the loan and communicate directly with the applicant.
(WNC and its referral partners are paid for our services by the lenders)
Our Process
The process is dependent upon the lender but it will generally follow the process below:
Eligibility of Location-We must first determine that the location of the business is on an area that qualifies for USDA financing. This is a 5 minute process.
Initial Contact/Referral of Transaction– Whether we are contacted by the applicant or through a referral partner, we require an initial call with the prospective applicant to better understand the transaction. When a referral partner is involved, we keep the referral partner abreast of the status but we need to work directly with the applicant.
Eligibility Determination– One we obtain the Registration, we determine what initial documents are required for eligibility determination and submit Eligibility Determination Request Form with those documents to our lenders for them to determine if they will entertain an application and the general terms they would offer.
Indication of Interest/ Once we have received an agreement from one or more lenders to accept the application and an estimate of terms, we send out a written Indication of Interest for acceptance and execution by the applicant.
Document Checklist– Once we have received the executed Fee Agreement, we will send the applicant a Documentation Checklist and any lender or loan specific forms which will outline what is needed to submit the loan application for approval. In some cases we will submit the application to multiple lenders for approval.
Conditional Approval/Terms Sheet– Most lenders will issue a Conditional Approval with terms or a Terms Sheet. The applicant will be required to “Accept” the terms and most lenders then require payment of the fee for the Property Appraisal. The cost of this appraisal will vary based on the property.
Clear to Close/Closing of Loan – Once all conditions have been cleared including a satisfactory appraisal, the loan is then scheduled to close. Each Lender is different but at some point, each lender will take charge of the loan and communicate directly with the applicant.
(WNC and its referral partners are paid for our services by the Lenders)
Getting Started
If you are interested in obtaining an SBA 7(a) Loan, we recommend that you click below and complete a Loan Registration Form, scheduling a call to discuss your loan request.
Getting Started
If you are interested in obtaining an SBA 504 Loan, we recommend that you click below and complete a Loan Registration Form, scheduling a call to discuss your loan request.
Getting Started
If you are interested in obtaining a USDA B&I Loan, we recommend that you click below and complete a Loan Registration Form, scheduling a call to discuss your loan request.