Inside Money Today

Lendinero's blog on Growing Your Business

Lendinero SBA Loan Services: SBA Loans & Small Business Loans

What is a the Lendinero SBA Loan Service?

Lendinero is a leading online marketplace that will match you with the best business loan for your company. Now, we are offering an SBA Loan Service solution for your small business. An SBA loan is a small business loan that is guaranteed in part by the U.S. Small Business Administration and typically made by a bank.   We can conduct all of this online, via phone, email and the internet to make the process of obtaining an SBA loan fast and simple.

Why should I apply for an SBA loan?

SBA loans offer longer terms, great rates, and lower monthly payments than other loan options.  An SBA loan is good for your business if you have long-term needs, you are seeking the lowest interest rate, you are seeking a monthly payment on your small business loan.

What types of SBA loans does Lendinero facilitate?

We facilitate SBA 7(a) loans for working capital and debt consolidation as well as SBA 7(a) loans for commercial real estate purchases or refinance.

How does Lendinero protect my identity and data privacy?

One of our top priorities is keeping your data private and secure. Your data is encrypted on our website if you fill out information.  In addition, your application and documents need to be sent to: [email protected]  Our domain name (lendinero.com) uses network using high-level encryption, and we monitor every step of each transaction.

We use GoDaddy Secure Site as a third party verification to confirm that all transactions on the site are protected with up to 256-bit Secure Sockets Layer encryption. In addition, when you send it to [email protected] you will have an email receipt.  Once you send your information to ([email protected]) you sent it thru our private servers and you know that our domain name is registered with GoDaddy.  If anything should ever go wrong regulatory agencies can request a copy of all emails that are sent and received tied to lendinero.com from our private servers and godaddy. Also, we have disclosures on-line which you can read regarding our Privacy Policy. We take measures to protect your financial information.  Also, you can contact the attorneys we use for any legal matter Glantz Law.

Eligibility

What are the basic requirements?

Businesses that qualify for a Lendinero SBA loan must generate $100,000 to $5 million in annual revenue.  This is very important: YOU NEED TO B PROFITABLE AND CASH FLOW POSITIVE. PROFITABLE MEANS THAT WHEN YOU PROVIDE US WITH YOUR BUSINESS TAX RETURNS AND PROFIT AND LOSS STATEMENTS YOU NEED TO SHOW A NET PROFIT.  CASH FLOW POSITIVE MEANS THAT AT THE END OF THE MONTH YOUR MONTHLY COSE OUT BALANCES NEED TO BE POSITIVE.  You must demonstrate that your small business can afford to make the SBA small business monthly loan payments.  IF YOU CAN NOT MEET THESE REQUIREMENTS, NO NEED TO WORRY.  WE HAVE ALTERNATIVE PROGRAMS WHICH ARE MORE EXPENSIVE AND MUCH EASIER TO QUALIFY.  WE CAN GUIDE YOU STEP BY STEP DURING A 6 MONTH TO 12 MONTH PERIOD TO MAKE SURE THAT YOU TAKE THE STEPS NECESSARY TO OBTAIN AN SBA BUSINESS LOAN.

Working Capital or Debt Consolidation Loans from $30,000 to $350,000

 

•Minimum 2 years in business
•U.S. based business owned by US citizen or Lawful Permanent Resident who is at least 21 years old
•Good personal credit score of 600 or higher
•Aside from good personal credit; you must have sufficient trade lines on your credit report to demonstratethat you can manage debt.  You can have a 700 credit score and if you have only 1 credit card with a $1,000 limitdoes not demonstrate that you can manage credit.  On the contrary, you can have a 650 credit score and have an auto loan, a mortgage and 6 credit cards with the proportionate balances less than 60% the credit limit and this demonstrates that you can manage credit.
•No outstanding tax liens with the IRS
•No bankruptcies & foreclosures in the past 3 years (no mortgage loan modifications)
•No recent charge-offs or settlements
•Current on government-related loans

Commercial Real Estate Loans from $350,000 to $5,000,000

•The real estate must be majority owner-occupied. This means that at least 51% of the square footage of the property you’re buying must be occupied by and used by your business.
•Time in Business: 3+ Years  (if you have been in business for less than 3 years; we have other options for you).
•Business owners must have personal credit scores above 675
•Cash Flow: Sufficient business and personal cash flow to service all debt payments demonstrated by 3 years of tax returns and interim financial data (profit to loss and balance sheet)
•SBA Specific Requirements: No delinquencies and/or default on government loans

Do I need to personally guarantee the loan?

All business owners who own 20% or more of the business must provide a personal guarantee. Married couples who collectively own 20% or more of the business when their shares are combined, must both provide a personal guarantee.  Please have ownership records ready.  If you have owned the business for less than 1 year but the business has been operating for 5 years will be evaluated on a case by case basis.

What industries are eligible?

Most industries are eligible. Industries that are excluded include gambling, lending, life insurance, religious teaching, primarily political and lobbying activities, mining, mortgage servicing, real estate development, bail bond, pawn or private clubs, adult entertainment, arms dealers and some others. .  We will inform you if your are eligible for an SBA small business loan.

What can I use my funds for?

Need to expand? Need to execute a 6 month to 1 year growth plan? Need new equipment? Do you need to hire employees? Would you like to purchase or refinance commercial real estate? You can use your funds in numerous ways depending how much you’re borrowing.  You will need to disclose IN DETAILS HOW YOU WILL USE THE MONEY.  IN SOME CASES YOU MAY NEED TO PROVIDE A PROJECTED PROFIT TO LOSS STATEMENT.  OR, YOU MAY NEED TO PROVIDE AN EXPENSE OR INVESTMENT ITEMIZATION.  IF YOU ARE PAYING OFF OTHER DEBT SUCH AS BUSINESS CREDIT CARD OR A MERCHANT CASH ADVANCE – SHOW BALANCES, THE SAVINGS, AND HOW YOU WILL USE THE MONEY.

$30,000 to $350,000: Loans of this amount can be used for working capital (such as operational expenses, marketing, hiring, etc.), new equipment purchases, and to refinance existing business debt not secured by real estate (such as cash advances, business loans, personal loans from online lenders like lendingclub.com, private loans from investors and equipment leases).

$350,000 – $5 million: Loans of this amount can be used for the purchase or refinance of commercial real estate. To qualify, the real estate must be majority owner-occupied. This means at least 51% of the square footage of the property being purchased must be occupied by and used by your business.

I’ve been turned down by my bank before. Can I still get a SBA loan?

Yes. SBA Guidelines are different than bank lending guidelines. We encourage you to apply.

Can I get another small business loan?

Yes.  If you get a merchant cash advance or an alternative business loan after your SBA small business loan.  Merchant cash advance lenders or daily or weekly payment lenders will allow you to have an SBA loan because it is a non competitive product.  Also, the cash flow and lending guidelines are different.  Why is this important?  An SBA loan is good for long-term needs and not short-term need.  If you need to purchase inventory or have an emergency you need to resolve for your small business you may need some immediate cash.  Daily or weekly payment small business loans are ideal to resolve short-term business cash needs.

Pre-Qualification

Before You Apply; You Need to Prequalify?

The Debt Service Coverage Ratio (DSCR) is a financial ratio used by SBA lenders to determine if you can afford a loan. It’s calculated by dividing your business’ ANNUAL NET OPERATING INCOME by THE PROPOSED LOAN ANNUAL PAYMENTS. Generally, SBA lenders prefer borrowers with a DSCR over 1.25. Notice: It’s ANNUAL NET INCOME NOT  GROSS ANNUAL INCOME.  Your business can generate $2,000,000 per year and be net $20,000.  We will use the $20,000 and not $2,000,000.  Why? An SBA loan has a monthly payment loan and your business must be positive and have sufficient cash left over every month to pay the monthly payment.  Since its a long-term loan you must demonstrate that during the last 2 to 3 years you have been able to manage cash flow on a positive basis.  SBA loans will trust that if you have you have been able to be positive during the last 3 years that you will continue to do the same for the next 3.  If you were positive the last 4 months and the last 2 years you had a poor monthly close out balance they will not trust you in making a monthly payment.

For example, suppose your annual business income is $100,000, and you want to take out a 10-year $500,000 SBA loan. Your loan payments for one year will be approximately $66,612 (the loan calculator shows a monthly payment of $5,551 – simply multiply this by 12 to estimate the annual payment). Dividing $100,000 by this number gives you a DSCR of 1.5. This is considered good and will help you get approved for SBA financing.

By ensuring your DSCR is above 1.25, the lender be confident that minor changes to your business’s revenues or expenses won’t result in a default on the SBA loan. If, when working with the SBA loan calculator, you notice your DSCR number is under 1.25, you’re probably requesting more money than an SBA lender would be willing to loan you. Consider reducing the amount you’re requesting or double check the figure you’re using for annual business income (including owner’s salary).

**PLEASE USE CALCULATOR BELOW TO DETERMINE IF YOU QUALIFY.  ONE OF OUR ADVISORS CAN HELP YOU PRIOR TO APPLYING.

How do I apply and what do I need to apply?

• Complete our 1 Page Loan application and you can apply on-line or download the application PDF (Apply)
• Send us the last 4 months of bank statements so we can analyze recent cash flow
• Last year corporate tax returns
• Include last 3 year Financial Worksheet that (very simple) You Report Your Gross and Net Income for the last 3 years.

Once we receive the application, the basic documents and the processing/application fee we will initiate the process.

•$150.00 processing fee for loan requests less than $200,000
•$300.00 processing fee for loan request from $200,000 to $500,000
• $500.00 processing fee for loan request from $500,000 to $1,000,000

lendinero sba loan service

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Outcome 1: You Get Funded
That simple.  If all your paperwork is true and correct and you pass the underwriting state you get funded.

Outcome 2: You didn’t pass the underwriting stage

We will need to process your loan under our express programs because underwriting found something in your paperwork that does not comply with the guidelines.  No worries because we can provide you with other solutions. Our express programs have monthly rates that range from 1% to 3% per month, daily or weekly ACH payment, repayment terms that range from 3 months to 18 months.  These loans will help you resolve your immediate business needs, help you manage and obtain corporate credit history, and while you have this business loan we can place you under a monitoring program to help you reapply for an SBA loan once you make the corrections necessary in managing cash flow, improving your credit or whatever else is needed. We will credit the $150 application fee and refund it back to you if take an express loan program. 

What Documents Do I need?

•Last 3 Years of Tax Returns (business and personal)
•Year-to-Date Profit and Loss (P&L) Statement
•Year-to-Date Profit Balance Sheet
•Business Plan and 3 Years of Financial Projections
•Business Certificate/License
•Owner Résumé
•Business Lease
•Personal Asset and Liabilities List

Pricing

What will my interest rate be?

Interest rates are variable and depend on the loan amount:

Working Capital and Debt Consolidation / Refinance

6.75% (Prime Rate plus 2.75%) for loans $50,000 – $350,000
7.75% (Prime Rate plus 3.75%) for loans $30,000- $49,000

Commercial Real Estate Loans

5.50% to 6.75% (Prime Rate plus 1.50% to 2.75%) for loans $350,000 – $5 Million

Are there fees or other costs?

Working Capital or Debt Consolidation / Refinance Loans: We charge a one-time referral fee of no more than 3% of the loan amount and a one-time packaging fee of no more than 3% of the loan amount. For loans $151,000 – $350,000, there is a 3.25% guarantee fee paid to the SBA. Bank closing costs typically add about another $317 and include standard bank fees though additional 3rd party report charges may apply. Total closing costs and processing fees will range about 6%  to 7% of the loan amount.  Keep in mind you are about to get business loan  with an annual rate from 5% to 9% with a monthly payment.   Also, we disclosed the processing fee to you.  If you are denied at the last minute for any reason we can credit or refund the fee is you obtain an alternative business loan with us (a daily or weekly payment loan).  If you don’t take an alternative business loan with us; the fee is non-refundable.

Commercial Real Estate Loans: For SBA commercial real estate loans over $350,000, there is charges of a one-time referral fee of no more than 1.5% of the loan amount and a one-time packaging fee of no more than 1.5% of the loan amount. For loans between $350,000 – $700,000, there is a 2.25% guarantee fee paid to the SBA. For loans between $700,001 – $1,000,000, there is a 2.625% guarantee fee paid to the SBA while for loans over $1,000,000, there is a 2.8125% guarantee fee. Bank closing costs typically add about another $5,000 and include standard bank fees, appraisal, and title fees though additional 3rd party report charges may apply.

Even after fees, SBA loans are vastly cheaper than the majority of alternative financing and alternative lender options.  The only fee you pay for up front is the processing fee.  All other fees, SBA guarantee fee, referral or packaging service fees will be paid at the time of closing –  some cases paid by you and the others will be deducted from the loan amount.

What are the repayment terms?

SBA working capital loans have 3 years to 10 year repayment term. SBA Commercial Real Estate loans have a repayment term of 25 years. Our long repayment terms result in very low monthly payments..

How long does it take to get my funds?

After completing the application, you can receive your funds in as fast as 14 business days. Average time is 2 to 5 weeks.  Most loans only take a couple of weeks from application completion to funding. Loans above $150,000 and commercial real estate loans up to $5 million typically take a bit longer, from 4-8 weeks. The faster you provide us your supporting documentation, the faster your loan can be funded. With your help, the process moves very quickly.

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