Financing the deal is one of the most critical aspects in getting the deal done.  Florida Business Advisors helps match SBA and Commercial Lenders with Buyers to expedite the transaction and create a smooth working relationship between all parties.  We assist the Lender with key background information they need to understand the company's present and future performance, and work diligently to bring the financing to a successful conclusion.  Some Sellers prefer seller financing as the deal gets done quicker and with less concern about the business qualifying for financing.  In fact, many SBA and Commercial lenders require the seller to hold a note for part of the purchase price to insure their continued participation in the business.

•  Seller Financing
    Seller Financing is an attractive way to lower your immediate taxes from the sale plus generate future interest payments in addition to the principal.  By examining the buyer’s credit report, financial statement and personal background, a seller may assure themselves of the integrity and strength of the buyer.  The sales process happens much more rapidly and removes the 2-3 month period that SBA may require before the loan is fully underwritten and ready to close.  The note and security agreement are drafted by the closing agent or seller’s attorney and collateralize the assets of the business, and sometimes a personal guaranty from the buyer.  In addition, Sellers who finance their purchase with an acceptable down payment from the buyer often realize an additional 15% or more of their asking price than sellers who demand all cash.  Acting as the bank for the buyer is an attractive option for all parties involved.
  

•  The Four "C's" of Lending
  In a simple way you can understand the lending process by thinking of the four "C's" -- Cash, Credit, Collateral and Character.  Each of these factors plays a fundamental role in your ability to acquire both SBA or standard commercial financing.  First you must have sufficient cash, commonly referred to as “equity” to arrange financing.  Typically this may be in the 20-30% range.  Next, your credit must be excellent.  Collateral may include stocks and bonds, 401K’s, investment real estate and other assets as security for the loan.  Finally your character must be sound and your background must demonstrate the experience, education and ability to be successful in your new business venture. 
  
  
•  Benefits of an SBA Loan
  Among the many benefits of an SBA Loan are:
  1. No early balloon payments.
  2. Longer amortization schedule.
  3. One closing.
  4. Lower overall down payment.
  5. No "payable upon demand" clause.
  6. No prepayment penalty, or easy "5-3-1" structures.
  7. SBA loans are assumable.
  
  
•  What Can an SBA Loan Be Used For?
  You can use an SBA Loan to:
  1. Start a new business.
  2. Construction of facilities.
  3. Purchase land or buildings.
  4. Expand your business.
  5. Purchase machinery or equipment.
  6. Purchase a business.
  7. Refinance debts.
  8. Finance increased receivables to augment working capital.
  
  
•  What Are the Credit Requirements?
  1. Management must have sufficient expertise in the field to operate the business.
  2. The business owner must have a reasonable amount of their own money invested in the business.
  3. Demonstrate that the past earnings record and probable future earnings will be sufficient to repay the loan.
  4. Owners must pledge sufficient assets to secure the loan.
  5. Owners, partners, principal stockholders, officers and managers must be of good character.
  
  
•  How Much Can I Borrow?
  7(a) LOAN $5,000 to $2,000,000 based on amount of guarantee.
  
  504 LOAN $250,000 to $10,000,000
  
  SBA EXPRESS Up to $150,000
  
  MINORITY AND WOMEN PREQUALIFICATION PROGRAM Up to $250,000
  
  
•  What Type of Terms and Rates Are Available?
  SBA loans range from 5 to 25 years depending on the type of loan and the allowed use.  Rates range from prime plus a spread adjusted quarterly to fixed and variable rates with caps over prime depending on the type of loan.
  
  
•  Prime Rate
  Click on Prime Rate above and go to bankrate.com to find the current prime rate.  Link also features financial calculators to compute payments.
  
  
•  The SBA Process
  As a Buyer you can pre-qualify by providing the lender with personal financial information to assess your credit profile.  Once you have decided upon a business and executed a contract, the lender will review the deal structure and make an initial internal inquiry to assess the interest by bank or institutional executives.  Once accepted internally, you and your lender complete the necessary SBA documentation to submit the loan.  The Seller will also provide tax returns and other key financial statements to support the process, and the loan officer then prepares the final package for submission to SBA.  Once received by the SBA the package is reviewed and a response is given to the local lender.  Often there are additional documents and conditions necessary to finalize and approve the loan.  From start to finish this process can take as little as three weeks but may take as long as 6 to 12 weeks for completion.
  
  
•  Types of Businesses Financed by SBA
  SBA generally favors asset-based businesses over businesses heavily valued with goodwill.  At the same time businesses with lower asset value but strong and progressively upward earnings receive considerable attention.  Tax returns verifying income to owners and net profits are a necessity, as well as clean books and records.  Businesses that have financials audited by CPA's exhibit additional strength.  There is no single list of desirable businesses, but the more stable the business with strong prospects for future growth, the better the view by the SBA.
  
  
•  SBA Lenders
  We work with many different lenders and help you decide on the best options for your needs. Lenders in the Bay Area include Community Bank of Manatee, United Bank and Trust, CIT Small Business Lending, St. Petersburg Certified, Bank of America, Florida First Capital Finance, Business Loan Center, Washington Mutual Bank, Southern Commerce Bank, Zions Small Business Finance, Tampa Bay Economic Development Corp., GE Small Business Capital, Union Planters Bank, First Community Bank - S.W. Florida, Bank of the West,  Commercial Capital Corp., Regions Bank, Banco Popular North America, Landmark Bank of Florida, The Provident Bank, Peoples Community Bank West Coast and others.
  
  
•  Community Bank of Manatee
  Contact Chris Kneer, VP to discuss SBA financing.  Phone 813-625-2471.
  
  
•  United Bank
  Contact Lynn Johler, VP/SBA Financing at 727-824-8726.
  
  
•  Venture Capital
  Well-known firms such as Florida Capital Partners, New South Ventures, Advantage Capital Partners, Stonehenge Capital, Quantum Capital Partners, Lovett Miller & Co., South Atlantic Capital, Communications Equity Associates and others are also available for mid-market transactions.
  
  
•  United States Small Business Administration
  Visit this outstanding web resource for answers to your questions on SBA lending.