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SBA Commercial Real Estate Acquisition Program

Product Review

Loan size: $500,000 - $5,000,000

Loan Description: SBA 7a loan program

Occupancy: Owner Occupied

Use of Proceeds: Commercial Real Estate Acquisition and Refinance

Time to Funding: Up to 45 business days

Interest Rate: Prime Rate plus 1.5% to 2.75% • Fixed and variable rates

Financing: Up To 90%

Loan Term: • 25-year, fully-amortizing CRE loan with no prepayment penalty after 3 years:

Year 1=5% | Year 2=3% | Year 3=1%

Payment: • Monthly payments are debited from checking account

Fees: • 3% processing fee and packaging fees plus bank closing costs • 2.25% to 2.76% SBA Guaranty fee

depending on loan size

Security: • First lien on subject property + best available lien on business assets + personal guarantee

Qualifications and Borrower Eligibility

Personal Credit Score: • Minimum 685 FICO

Public Records: • No bankruptcies or foreclosures in past 3 years • No outstanding collections • No open tax liens • No recent 30+ day late payments.

Cash Flow: • Sufficient business and personal cash flow to service all debt payments • Demonstrated by 2 years of tax returns and interim financial statements

SBa specific criteria: • No felonies No delinquencies and/or default on government loans

Basic eligibility: • 2+ years in business • Owner(s) must be U.S. citizen(s) or Lawful Permanent Residents • Business must be located in the U.S. • Business must be open to all on a nondiscriminatory basis • Businesses must be operated for profit • Business must be able to demonstrate repayment ability from earnings • Business must not be involved in lending, investing in real estate, religion, politics, gambling or sex-related industries • At least 51% of the property’s square footage must be occupied and used by the business.

Use of proceeds: • Refinance or purchase of owner-occupied commercial real estate

Profit & loss statement: Sizeable rent expense on P&L A large office rent/lease expense on business tax returns or P&L indicates an opportunity to replace the rent payment with a commercial real estate loan. For example, a $1 million CRE loan is about $6900/month.

Balance sheet: Large non-current asset and/or accumulated depreciation Large long-term liability If there is a large balance in the “Current Portion of Long Term Debt”, there is likely an impending balloon payment, and a good opportunity to discuss a refinance.

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