LRI is committed to fueling small business growth. We offer Small Business Administration (SBA) loans for:

• Business Succession Financing
• Commercial Real Estate Financing
• Construction Loans
• Business Acquisitions
• Real Estate Purchases
• New Construction
• Business Renovations
• Franchising
• Leasehold Improvements
• Equipment Purchases
• Inventory purchases
• Working Capital
• Business Expansion
• Debt Consolidation
• New Business Start-ups
• Other Short Term Needs

What is an SBA Loan?

The Small Business Administration (SBA) makes loans available through participating lenders to eligible small businesses on favorable terms. The SBA offers these loans because it recognizes the importance of our nation’s small businesses.

Why use an SBA loan?

SBA loans offer competitive rates and longer terms. In addition, they have no points, no balloon payments, and no pre-payment penalties on loans with terms less than 15 years.

What can I use an SBA loan for?
Here are some of the most common uses of SBA loans:

• Purchasing or expanding real estate
• Buying a business or franchise
• Purchasing machinery and equipment
• Leasehold improvements
• Refinancing certain existing business debt
• Working capital in conjunction with the above

Who is Eligible?

Most for-profit small businesses are eligible for an SBA loan. These include manufacturing, wholesale, retail and service businesses, as well as independent or franchise businesses.

Here are the general guidelines for eligibility:
SBA 7(a) Loan Qualifications:

• Retail and service businesses with receipts (3-year average) not exceeding $5 million to $20 million, depending on the industry.
• Wholesale business with employees up to 100 regardless of sales volume.
• Manufacturers with employees up to 500 depending on the industry, regardless of sales volume.

SBA 504 Loan Qualifications:

• Net Income must be under $2.0 million.
• Tangible net worth must be under $6.0 million.

How much can I borrow?

LRI offers total financing packages up to $5.0 million.

What are the interest rates and fees?

SBA offers variable and fixed interest rates for both SBA 7(a) and SBA 504 loans. Your actual rate will be determined by a number of factors including the project size, projected loan term and the borrower’s credit profile, but the rate will never exceed The Wall Street Journal prime rate plus 2.75%, as specified by the SBA.
There are no points on an SBA 7(a) loan, although there is a low packaging fee. There is also an SBA guarantee fee that can be as low as 1.7% of the amount borrowed and it varies depending on the size of the loan. This guarantee fee can be financed as part of the loan and is paid upon closing.

What are the terms of repayment?

All SBA 7(a) loans are fully amortized. Terms are:

• Up to 25 years for a take-out of a construction loan, real estate purchase, or real estate refinance.
• Up to 15 years for machinery and equipment.
• Up to 10 years for a Business Acquisition without real estate.
• 7 years for the working capital portion of the loan.

There are no balloon payments, hence no surprises down the road. There are also no pre-payment penalties on loans with terms less than 15 years.

All SBA 504 loans are fully amortized. Terms are:

• Up to 25 years for real estate purchase or take-out of a construction loan.
• Up to 10 years for major fixed asset acquisitions.

There are pre-payment penalties on a 504 loan. Please call one of our field experts to get further information on the SBA 504 loan program.
What do I need to qualify?
The SBA needs proof that the owner is active in the business and is willing to make a reasonable commitment to it. Here are the most significant criteria that the SBA looks for:

• The owner must invest up to 30% and as little as 15% in a new or start-up business.
• The owner must be actively involved in the management of the business.
• All principals must show a satisfactory credit history.
• The business must demonstrate an appropriate debt/net worth ratio and adequate cash flow

How long does it take to get approval?

It can be just a matter of days for the SBA’s decision once we credit-approve a loan.

How should I apply?

The quickest way to apply for an SBA loan or to get more information is to call us toll-free at 1-800-311-8570. We look forward to working with you.

Contact LRI for a small business loan today!