SBA Loans & Commercial Financing in Florida

Primary SBA & Commercial Products by Banco Popular & their requirements

1. Business Acquisitions Financing
• Mergers / Partner Buyouts
• Direct Acquisition by Individual Buyers
2. Commercial Real Estate Financing
• Acquisitions / Expansions
3. Franchise Financing
• Acquisitions / Expansions / Start-ups
4. Seller Refinance

1. SBA Business Acquisitions Financing - Mergers / Partner Buyouts / Individual buyers
• 80% financing for new buyers (10% seller note on standby)
• 90% financing on the real estate component of the business
• Equity injection can come from HELOC (if covered by cash flow)
• 100% financing for partnership buy-out
• 10 year term on SBA loans, more if real estate is involved in the deal
• Financing up to $2 million - 100% goodwill (even if no real estate)
• The loan can include working capital
• The loan can include new equipment
• Buyers Qualifications
• New buyer must have direct or related experience in the business being purchased
• No bankruptcies for the last 7 years
• No judgments for the last 2 years
• Minimum Credit Score "625"
• The business being purchased must provide 1.2x historical debt service (financials)
  * 1.4x historical debt service is better
• There must be a positive trend in the business
• NO significant concentrations - (The business must not rely on one contract)
• What Does the Lender Need from the Buyer?
• Complete loan application
• Personal tax returns for 3 years (all pages)
• Detailed resume showing direct or related experience
• If the buyer owns other businesses, tax returns & financial statements for those

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2. Commercial Real Estate Financing - Acquisitions / Expansions / Refinancing
• Up to 90% financing
• Add to the loan: closing cost, machinery, equipment, & working capital
• Loan terms are up to 25 years with real estate
• Pre-payment penalty for first 3 years
• What does the lender need from the Buyer?
• Completed loan application
• Personal & business tax returns for 3 years (all pages)
• Financial statements no older than 60 days
• Business tax returns & financial statements if the buyer owns other businesses

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3. Franchise Financing - Acquisitions / Expansions / Start-ups
• 70% - 90% financing available, depending on the concept
• Must be an approved SBA franchise concept
• Must project cash flow coverage for 1.2 or more
• Proceeds available for franchise fee, leaseholds, equipment & working capital
• No loan to value requirements
• What does the Lender need from the Buyer?
• Copies of the franchise agreement and UFOC
• Three years tax returns and interims on all affiliates and owners in the buy with a 20% or more interest
• Personal financial statements and resumes from all owners 20% or more
• Completed loan application
• 1 year projections with assumptions
• Copy of the lease
• Cost estimates on leaseholds, equipment, etc. (if a start-up)

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4. Seller Refinancing - Do you owe a private note from the original purchase?
• Owner must meet eligibility on every loan
• There must be a 20% increase in cash flow
• Reasons for Refinancing
• Get cash out from the real estate if proceeds used for business purposes
• Pay off term notes, capital leases, operating leases, demand notes, credit lines
• No equity injection requirements
• What does the Lender need from the Owner?
• Copies of all notes and/or leases to be refinanced
• Three years tax returns and interims on company and all affiliates, all owners with a 20% or more interest
• Personal financial statements from all owners with a 20% or more interset
• Completed loan application
• Key items - notes payable schedule, owner must account for all debt service

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• Credit Hot Buttons on SBA Approval
• Cash flow must be going UP
• Buyers must have related industry experience
• Buyers personal credit >625
• Buyers required salary - must have room to pay the debt service
• Equity injection can come from HELOC, IRA & 401K through Benetrends - (Using the IRA without a penalty, using the money tax free)
• Must have positive trends in the business
• Real estate - Good but not needed
• The loan size: $50,000 to $250,000  or  $250,000 to $2 Million If less than $50,000, you can apply for an SBA credit card up to $35,000 (Line of Credit). SBA doesn't make loans less than $50,000.
• Buyers Homes Equity
• If there is a greater than 80% Loan to Value ratio on your home, SBA probably won't put a lien on it.
• If you have more equity less than 80% SBA will require a lien on your home.
• Who can Qualify?
• Most for-profit businesses are eligible
• Retail and service businesses - average annual sales under $6 million
• Wholesale businesses - fewer than 100 employees
• Manufacturers - fewer than 500 employees
• Buyer must be a US citizen or have a green card
• Who is the SBA Preferred Lender Banco Popular?
• 112 year old bank founded in 1893
• Assets over $44 billion
• National Preferred SBA Lender - This means they can qualify the loan for SBA without SBA approval