SBA M&A LENDING

SBA M&A LENDING

Quick Reference Guide ? 504 Loan Program

Loan Purpose

? Purchase existing building ? Land acquisition and ground-up construction (includes

soft cost development fees) ? Expansion of existing building ? Finance building improvements ? Purchase equipment ? Refinance

Loan Structure

(General Guidelines)

? General purpose straight acquisition ? 50% bank loan ? 35% SBA (CDC) loan ? 15% borrower down payment

Other Loan Program Requirements1 Collateral

? 51% owner occupancy required for existing building ? 60% owner occupancy required for new construction ? Equipment with a minimum 10-year economic life

? Generally, the project assets being financed are used as collateral

? Personal guaranties of the principle owners of 20% or more ownership are required

Elligible Business Size and Types

? For-profit businesses

? Business net worth not to exceed $15 million

? $5 million net profit maximum

1Financing subject to credit and collateral approval. Terms and conditions subject to change. Other restrictions may apply.

Contact our SBA M&A Lending Team

Heather Endresen | Senior Loan Officer Heather.endresen@ 714.404.3648

Lisa Forrest | Senior Loan Officer Lisa.forrest@ 425.999.2042

?2017 Live Oak Banking Company. All rights reserved. Member FDIC

SBA M&A LENDING

Quick Reference Guide ? 7(a) Loan Program

Loan Purpose

? Business Acquisition ? Practice Acquisition ? Partner buyout ? Stock or Asset Purchase ? Key Manager buyout ? Expansion through Acquisition ? Working capital

Loan Structure (General Guidelines)

? 75% bank financing ? 25% cash down payment ? Injection can be a combination of buyer funds and seller subordinated debt ? 10-year amortization ? Fully amortized / no balloons ? No pre-payment penalties for loan terms under 15 years

Other Loan Program Requirements

? 25% equity SBA required for preferred processing ? Industry or complementary experience necessary ? Solid trends in business performance ? 100% buyout required ? Loans up to $5 million

Down Payment Sources

? Cash/savings ? ROBS rollover acceptable (consult your tax advisor) ? Gift ? IRA (consult your tax advisor) ? Minority investor contribution ? Stocks/Bonds ? Search Funders

Collateral

? Business assets ? Personal guaranties of all 20% principal owners ? Personal assets may be required to meet SBA collateral guidelines

Eligible Business Size and Types

? Business net worth up to $15 million ? Two-year average net profit after taxes can be up to $5 million ? Nonprofits not SBA eligible

Contact our SBA M&A Lending Team Heather Endresen | Senior Loan Officer | Heather.endresen@ | 714.404.3648

?2017 Live Oak Banking Company. All rights reserved. Member FDIC

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download