Will The SBA Release A Lien On My Home Following an Sba loan Default;

After the SBA Offer In Compromise and SBA modification, SBA lien releases are the next most popular service that potential clients come to me for. There are usually two types of lien release scenarios:1) The borrower has recently defaulted on their Sba loan, and they want to know if the SBA is going to foreclose on their home.2) The individual has filed, and been discharged from, chapter 7 personal bankruptcy, but the SBA lien still remains on their home and the individual wants to know if the SBA will release their home.The answer to both questions is basically the same. If the SBA (or the SBA lender) feels that there is equity in the home, there is a chance that they will foreclose in order to convert that equity to cash. The decision to foreclose is largely a business decision, meaning that if it makes financial sense to foreclose, they'll do it. For example, if your home is worth $500,000 and you have a 1st mortgage of $100,000, and the SBA has a 2nd lien to secure their loan, you can count on a foreclosure since there is $400,000 in equity in the home. The lender who services the loan for the SBA is required to liquidate that piece of collateral if some alternative arrangement cannot be worked out. If they don't foreclose, they risk losing part or all of the SBA guarantee. Sometimes, the situation is not quite as clear. Let's say your home is worth $300,000 and your first mortgage is $210,000. First of all, it's usually assumed that your home would sell at a 20% discount, so the value the lender would work off would be $240,000 (80% x $300,000 = $240,000). Based on this math, there is about $30,000 in equity in the home. You are now in nebulous territory. The lender would need to spend $210,000 to pay off the first PLUS the costs of foreclosure. Some lenders would foreclose in that situation, some wouldn't. So How Do I Get My Lien Released? If your home HAS EQUITY (as defined above), you will need to make an offer for an amount close to the amount of equity in the home. Of course, how much equity you have is debatable, and trust me, it will be debated. When you make your offer, it's reasonable to look it from their perspective. In other words, take 80% of the fair market value, then subtract costs of foreclosure and existing liens. Your offer should be somewhere in that neighborhood.If your home DOES NOT HAVE EQUITY, you are probably not in immediate danger of foreclosure. However, just because your home doesn't have equity in it doesn't mean they will release your home. Many lenders say that they'll just wait until one day when you've paid your mortgage down, and the value has gone up, then foreclose at that time. Most people don't want to take a "wait and see" approach, and there is certainly no reason why you can't approach the lender/SBA and make a lien release offer. In most cases, if there is no equity whatsoever, an offer of a material sum will be considered.

Will Sba loan Forgiveness Impact My Credit

For many small business owners, their credit history is a source of pride. For years, their payment record has been pristine. They've never been late on a payment, and the idea of defaulting with a creditor was not even a possibility. All that changed when the recession hit in late 2008. They wanted to pay their creditors, but there literally was not enough money to pay everyone.Today, when potential clients contact me, one of the first questions they ask is: "if an SBA settlement is approved, how will it impact my credit?" Like almost every other question I get, my answer is "It depends."When they ask about "credit", most people are referring to the credit reports that are issued by the three big credit reporting bureaus - Experian, Equifax, and Transunion. People basically want to know if their credit score will fall as a result of a settlement. Whether or not that happens depends on one factor: does your lender report to the credit bureaus?Surprisingly, not all lenders report to the credit bureaus. I worked for the lender who was the largest 7a lender for a number of years, and they did not report to the credit bureaus. Regardless of whether the borrowers paid on time or were 90 days late, it was never reflected on the personal credit of the borrower or personal guarantors. The lender's rationale was that since it was a commercial loan, it did not need to be reported. Of course, some lenders do report to the credit bureaus, in which case the fact that you defaulted and settled your SBA debt is likely to impact your personal credit score. If you are unsure if your lender ever reported the loan to credit bureaus, every borrower is entitled to a free copy of their report from each of the three credit bureaus on an annual basis. Unlike the commercials you see on TV for "free" credit reports, http://www.annualcreditreport.com truly is free because the credit bureaus are required by law to show you what is on your credit report.In addition to what can be viewed on a credit report, it's important to remember that even if a credit event is not reported on a credit report, it doesn't mean that a future lender won't ask a question about it if you apply for a business loan for a new venture. Lenders will often ask for a resume of the business owners, which could inevitably leads to a discussion about your failed venture and whether any lenders lost money as a result.Overall, my take on the subject is that regardless of whether your lender reports to the credit bureaus or not, most borrowers stop making their payment not by choice, but rather because they can't afford it. If a borrower has the luxury of deciding whether or not to pay their bills, they probably aren't going to qualify for Sba loan forgiveness anyway since the SBA OIC process is designed to help borrowers who lack the resources to repay their debt in full, not because it's inconvenient to honor the obligation.

What Is The Sba loan;

If you're thinking of starting up a small business, then you've almost certainly thought long and hard about what exactly your small business will be about and whom it will serve. Indeed, despite what some may say, the fortune is not in the product, nor even in the service, but it is in the buyer, and in knowing your customer's wants, needs and difficulties. In fact, by simply asking your potential clientbase what troubles they are having, they will in fact develop your product or service for you and that will take sometimes years off of your quest to financial self-sufficiency. However, even with the perfect product or service, if you don't have a suitable place of business and the equipment to do the job, you won't be in business for very long. And this is where financial tools such as the Sba loan come into play.But what in fact is an Sba loan? And is it something that will help you create a winning business? First off, the Sba loan is a bit of a misnomer. In fact SBA stands for Small Business Association. Plus the group itself doesn't in reality hand out loans to little companies. Produced in 1953, the objective from the SBA would be to aid make certain competitiveness inside marketplace by educating smaller enterprise owners concerning the method of acquiring business loans as well as will help them in approaching finance institutions as well as other lending institutions. The concept right here is the fact that eventually the good results or failure you've got in getting a mortgage comes solely from how ready you might be. But, the SBA might help you get ready and teach you what it is advisable to know so that you can set your finest foot forward.That being said, if an Sba loan is simply regarding education, then will it be of use to you? This is a valid question of course. But consider the fact that the more you know, the better prepared you are. Although you may just want a loan, learning about the process is just as important as it will make getting them in the future that much quicker, especially if the banks see that you've taken the time to do the analysis. And with the overall economy in the state it is in, it really does make sense to know all you can.With that said, an Sba loan is something that is vital to your company as it will enable you to get the information necessary to obtain the funding you need. If your bank of choice has the inkling that you don't know what is expected of you, then your chance of getting that loan will become very low indeed. There are several different loan programs run by the SBA as well, and knowing which one you need is the first step to gaining the education (and the loan) to sustain your small business long-term.

What Is More Preferable, Merchant Cash Advance or Sba loan;

Are you anxious that the tightened restrictions on bank loans after the worldwide economic recession will impact your business cash flow? Do you fear that risky Small Business Association (SBA) loans will cause more problems than solutions for your business? Have you evaluated Merchant Cash Advance (MCA) as a likely financing option for your business? Are you finding it difficult to choose between Sba loans and MCA? This article can help you decide which option is a better fit for your business and will get it the capital required to make progress and flourish.Consider the following factors when choosing between an Sba loan and MCA.Necessary Financial DocumentationWell established organizations are expected to furnish records of present debts, loan balance, and installment schedules along with available collateral that can be offered to the bank. New business owners must attach a business plan that included details of monthly cash flow projections for the starting two years when submitting an application for an Sba loan. Your creditworthiness will be further assessed by digging out your credit card debt, liquid capital, personal loans and account statements, tax files, and ownership in any real estate.Merchant cash advance providers ask you to submit only two credentials along with your application. These are monthly credit card receipt volume and longevity of the business. These two factors by themselves will verify your eligibility for merchant cash advance and contribute towards the calculation of the sum to be advanced.High Approval RateBanks are judicious lenders. The SBA is only the loan facilitator. Your loan will be approved only after convincing the banks or brokers of your potential to pay back the loan. The number of financial documentation required along with the lender's caution lowers the likelihood of your Sba loan request being accepted. The financial slowdown has made it even more tricky to get Sba loans. MCA providers, on the other hand, only verify your average credit card sales volume in a month and the number of months the business has been in operation. Unlike Sba loans, merchant cash advance rules do not include low credit score and former bankruptcies as denial criteria for the application.Repayment Flexibility and Lower RiskSBA loan does not come with the flexibility of negotiating repayment terms once it has been approved. The payback timetable is fixed and incurs grave fines on breach. Banks may cease and auction your business assets. Even your individual assets such as your home and vehicle can be seized in case of failure to pay the loan, thereby making Sba loans very risky in a financially weak environment. Merchant cash advance comes with a flexible settlement plan. Every month you are obligated to pay a fixed percentage of your credit card sales to the provider. Your repayment amounts vary as when your sales are booming, you pay more. When your business faces the heat, the repayments reduce in amount and don't make the situation worse. The risk of defaulting is very small. Merchant cash advance impacts profit margins but is less dangerousMCA repayments eat into your profits a bit. But on the other hand, not being able to repay Sba loans can cause the closure of your business. Merchant cash advance is a far better, low risk, and flexible financing choice relative to Sba loans. Protect yourself from potential trouble by making certain you understand the advantages of MCA before filling your Sba loan application.

What is NOT permitted when applying for Sba loans

Sba loans are the most common loans offered to small businesses. These programs are available through qualified lenders. Most banks and non-bank lenders offer these types of loans, but some are much better than others with Sba loans. Because these programs are offered through a non-bank lender or bank, if the institution does not want to extend this offer to the client (even if the client qualifies for the loan under the basic SBA 7(a) standard) the SBA cannot force the lender to give the loan to the customer. These loans can be either term loans or lines of credit. There are restrictions on how SBA funds may be used. The following uses for proceeds from an SBA loan are not allowed;1. Refinance of existing debt, if the current lender may take a loss if the debt is not refinanced.2. Partial purchase of an existing business, or partial change of ownership of a business, if the business will not benefit from the change of ownership.3. Reimbursement of funds owed. This includes equity injection, or reimbursement of an equity injection given with the purpose of maintaining business operations until the SBA guarantee loan is disbursed.4. Repayment of federal or state withholding taxes or other funds held in escrow.5. For a business that is not sound.Lenders structure the loans based on SBA-guarantee standards. The lender provides the funds to the borrower, while the SBA guarantees a portion of the loan to the bank; both institutions share the risk on the loan. The SBA does not lend money, the bank does. Lenders evaluate whether they can do the loan themselves, or use the SBA guarantee if the application has weaknesses. Most banks like to see that the business has been in operation for at least 3 years before it will grant a commercial loan.) Also, banks do not have the same restrictions as the SBA. Some banks can make loans to non-profit organizations, gambling business, or even speculative businesses such as Real Estate Investing.

What Are Sba loans And How To Apply For One

Small businesses that cannot secure a loan through conventional means can apply for one of the Sba loans in order to obtain funds. However, they must first attempt to obtain a loan through a commercial lender, private source, or bank. Once the business is turned down for the loan, the owner may then apply for an SBA loan provided his business meets the SBA requirements including its definition of a small business.The business must be owned and operated independently in order to qualify for one of the Sba loans. Additionally, it must meet the predetermined specifications for size as far as the number of employees and revenue. Also, it cannot be a major company in its field. If approved for the SBA loan, the owner of the business is expected to comply with SBA regulations regarding matters of discrimination and public services.The SBA loan is acquired through the private sector, but the SBA (Small Business Association), a governmental agency, guarantees the loan. The business owner must pledge to repay the loan in its entirety before the SBA grants him approval for the loan.Several SBA loan programs are available. It is up to the borrower along with guidance from the lender to determine which one of the Sba loans is best suited for his needs. The interest rates, typically lower than those offered from the private sector, vary across the different types of Sba loans.When completing your application for an SBA loan, it is necessary to bring the following documentation with you:* A Business Plan- this details the type of business venture that you have and how long it has been in existence, along with the number of employees, actual or projected earnings, and ownership structure. This should include copies of business lease and business certificate.* A Loan Request- this details the manner in which the proceeds from the loan will be spent.* Personal Financial Statements- the personal financial statements, including signed copies of federal income taxes for previous three years of anyone who owns a minimum of 20 percent of the business must be provided. This includes owners, partners, stockholders, and officers.* Business Financial Statements- the complete financial statements for the business for the last three years must be provided including current business balance sheet, information on subsidiaries, projected outlook for income and finances of the business, and signed copies of federal income taxes for previous three years.* Intended Collateral- this details the specifics of the property being offered as collateral for the SBA loan.* Personnel Resumes- the resumes, including personal financial statement and history, of each major participant in a high-ranking, managerial position might be requested.

Vice President Biden Makes His Second Trip to the Gulf Coast; SBA Assistance Loans Surpass $15 Million

July 23, 2010 -- In his second trip to the Gulf Coast since the Deepwater Horizon oil spill began, Vice President Joe Biden traveled to Theodore, Ala., yesterday to assess efforts to counter the disaster. During his visit, the Vice President toured the Theodore Staging Facility, met with response personnel, inspected boom, and participated in a roundtable discussion with fishermen and small-business owners from the area. He was joined by National Incident Commander Admiral Thad Allen and NOAA Administrator Dr. Jane Lubchenco. Afterwards, the Vice President stressed the Administration's commitment to restoring the Gulf Coast: "We're not going to stop until this area -- all the entire Gulf -- has recovered; until the economy of the Gulf is revitalized and literally a way of life is restored," he said. "Because we're not just talking about a natural ecosystem that's in danger down here. We're talking about an economic ecosystem. "We're also talking about a cultural ecosystem, a whole way of life. Whatever it takes to make this Gulf right, we're going to make it right." Approved SBA Economic Injury Assistance Loans Surpass $15 MillionTo date, the U.S. Small Business Administration [SBA] has approved 181 economic injury assistance loans, totaling more than $15 million for Gulf Coast small businesses impacted by the Deepwater BP oil spill. Additionally, the agency has granted deferments on 707 existing SBA disaster loans in the region, totaling more than $3.7 million per month in payments. For information on assistance loans for affected businesses, visit the SBA's website at http://www.sba.gov/services/disasterassistance; call 800-659-2955 [800-877-8339 for the hearing impaired]; or e-mail disastercustomerservice@sba.gov. Additional ResourcesFor information about the response effort, visit http://www.restorethegulf.gov/. For specific information about the federal-wide response, visit http://www.whitehouse.gov/deepwater-bp-oil-spill. SOURCES: U.S. Small Business Administration, Unified Command for the Deepwater BP Oil Spill, The White House [photo by David Lienemann] ###TAGS: Alabama, Deepwater BP oil spill, Deepwater Horizon, economic development, economic impact, economic recovery, economy, fishing, Gulf Coast, SBA, small business, Thad Allen, Vice President Joe Biden, Deepwater Horizon Incident Joint Information Center, disaster loans, National Oceanic and Atmospheric Administration, NOAA, U.S. Coast Guard, USCG

Using the 7a Sba loan for a Business Acquisition

One of easier ways of becoming an entrepreneur is to acquire a business that has already been established by someone else. The risks related to acquiring a business are significantly lower than starting a business from scratch. Established businesses already have customers, an operating history, and hopefully profits as well. Additionally, obtaining a business loan for the acquisition of a business (while more paperwork) is usually easier than obtaining financing for a startup. This primarily due to the fact, again, that the risks are lower. The 7a Sba loan can be used for business acquisition purposes. As we have discussed before, the flexibility of this loan can allow you to finance varying parts of the acquisition differently. Prior to applying for a SBA guarantee, you should see if the business for sale has been preapproved for a Sba loan. If a business broker is involved then the broker may have acquired pre-approval from the SBA so that the transaction can happen more quickly. Additionally, a business broker will have generally assembled much of the paperwork required by the bank and the SBA in order to render both a lending and a guarantee decision. From time to time, business owners that are selling their businesses will already have a business plan in place showcasing the necessary components of the business and the owner's anticipation of how the business will grow over the next three to five years. This business plan is generally modified by the incoming owner based on the ideas that the new owner will implement once the business has been acquired.Whenever you intend to acquire a business, it is imperative that you complete your due diligence. Prior to applying for a 7a Sba loan, your accountant should thoroughly review the profit and loss statements, cash flow statements, and balance sheet of the prospective business to ensure that they are factually correct and match the business' tax returns.

Top 4 Mistakes That Borrowers Make Following Sba loan Default

1) Run and Hide - If you want to have any hope to save your business, the worst thing you can possibly do is stick your head in the sand and ignore the phone calls and letters from your lender. It's certainly unpleasant to deal with people whose job it is to shut you down, but avoiding them isn't going to make it any better. If you don't want to deal directly with the bank, engage an SBA workout expert to represent you.2) Start Selling Equipment - Hey, this ship's going down, so why not clear some cash while you can, right? Here's why: Your lender most likely has a claim to your business assets, so if you sell the business assets without the banks blessing, you open yourself up to fraud allegations from your lender. The guy you sold the stuff to won't be too happy either when the bank shows up and yanks the equipment from him.3) Claim Doom and Gloom - Many borrowers think that if they can convince their banker that things are truly awful with no hope of recovery, the lender will take pity and offer them assistance. Not true. If a lender thinks your business has no chance to survive, they will move quickly to foreclose and get judgments granted against you and your business. The lesson here is to just tell like it is....don't over-sell your need for assistance, but at the same time don't sugar coat it and make promises you can't keep. Just tell the truth.4) Make Deals With The Devil - Some people are so frantic about the possibility of losing their business, they'll sign up with the first workout firm that is willing to promise them the moon and the sun and the stars. Watch out for wolves in sheep's clothing. NOBODY can guarantee a successful workout. NOBODY can legally convince the SBA to lower your loan amount while letting you stay in business (only bankruptcy courts can do that). If someone promises you a deal that sounds too good to be true....well, you know the rest.

The SBA Commercial Loan Program You Must Know About

Knowledge is half the battle to getting funding in commercial finance these days. Half the battle is finding the loan programs that are not just in existence, but actually providing funding for commercial projects. The SBA has a program known as the 504 that is a real winner if you can qualify.The capital markets have gone through wild fluctuations this past 15 years. We've gone from quick and easy money that just about anyone could get for a project to the near failure of the markets to a state of cheap, but tight, money. As money has become tight, many have argued the commercial finance markets are dead. They are wrong, grossly so. This is because the agency lenders like the SBA have been trucking along without change through the entire period.The CDC/SBA 504 loan program is a combination financing package. It is designed to assist small businesses with large asset purchases such as real estate. The funding comes with a catch, however. It is tied into community redevelopment areas, which is where the Community Development Company ("CDC") comes in. The SBA does not provide direct loans or guarantees to the borrower, but does so through the CDC in the area that originates the financing.The 504 program creates a four party relationship. The first party is, obviously, you. As the borrower, you must put down 10 percent on the deal. The second party is a private bank that must put up a first for the initial 50 percent borrowed. The CDC then comes in and funds a further 40 percent with the SBA guaranteeing it. This may sound convoluted, but it is actually a tremendous opportunity. It provides you with 90 percent loan-to-value financing and makes the first loan from the commercial bank fairly easy to get since they sit in a first position and have loaned a much smaller percentage then they would in a traditional deal.The CDC/SBA 504 loan program is a real winner. That being said, it is also a complex deal with four parties involved. Make sure you retain an experienced commercial broker before seeking out this financing.

The Process for Obtaining an Sba loan

It's time to grow your business, you have managed it well, you've been fiscally responsible but you can't get a loan so you decided to turn to SBA who is willing to guaranty up to 75% of the loan. But how do you do it?First contact your local lender, as the SBA does not directly loan and instead acts through intermediaries guarantying loans for those intermediaries. If your lender thinks your application and plan are strong enough, they will contact the SBA if you lack the security of their normal standards.Also check your eligibility as the different types of loans have different eligibility requirements and applications from ineligible lenders won't be considered at all. You may also want to see if you are actually eligible for a non Sba loan.At this step look for special benefits you may get such as woman obtaining pre-qualification through non-profit or other benefits for being a minority.Now when you get ready to give your application remember the SBA is not entirely satisfied with just your basic finances, your character and personal responsibility and history as well as plans for the funds provided should also be included. They want to know they can trust you with tax payer's money. Be as honest as you can paint the best and most accurate picture of yourself as possible. When that's done submit your loan and wait for approval, most eligible applications are approved so don't sweat too much about it.Most of the work of the application will be gathering all the information about yourself, your history, and your plans. This may be time consuming but it is essential. Also talk with your local lender about the condition and quality of your application and that it has been completed correctly.Requirement of Personal Financial Statements: You will need to list all your personal assets. You will need to list all of your liabilities. You will need to list all your monthly payments on different bills. You will need to list your personal tax information for the past three years.

Small Business Purchase Loans Increase By Following SBA Requirements

Obtaining small business purchase loans was nearly impossible at the height of the financial crisis. Bankers were so fearful of making risky loans that they were turning down solid proposals as well as the weaker applications. But with encouragement from the government, through the Small Business Administration, institutions in the SBA's lending network now are turning on the money spigot again. Meanwhile, California borrowers are learning how to submit approval-ready loan applications.The SBA ordinarily does not directly loan money to businesses. Its role is to guarantee a substantial portion of each SBA-qualifying loan made by a participating bank, provided, of course, the borrower's application complies with the SBA requirements.To get the green light, the request for small business purchase financing from an SBA-backed lender should include:1. A logical business purpose: That means, for example, that a request for a loan to buy a company that is over-priced is not likely to be approved. Nor is an application involving purchase of a company--even at a low price--that does not seem to have good prospects for future success.2. Sufficient collateral to secure the loan partially or in full: The lender will usually require a lien against the assets of the business, including any equipment, furniture and fixtures, and inventory. In many cases, the bank looks to additional buyer assets to further secure the obligation. That can involve other business assets, even equity in the borrower's real property.3. Solid financial performance by the business to be purchased: Balance sheets, profit and loss statements, receivables and payables accounts ledgers, and bank statements, all going back at least three years, represent the minimum amount of paperwork that should be provided. If the business has recently been impacted by the slowed economy but has a long history of success, it might be useful to provide information on business results going back five to seven years.4. Financials of borrower: In addition to the data needed on the company, the proposed lenders want to see the balance sheet, and the income and expense ledgers for the individual (or individuals) requesting the loan. A credit check will certainly be conducted, and borrowers will need to have good credit records in order to be considered for the requested funds.5. Experience of borrower/buyer: Older rules that were followed in the years before the mortgage meltdown often allowed an individual with general business experience to buy a company in an unfamiliar industry, and then get quickly up-to-speed on the particulars of the business. Most bankers using Sba loan programs won't follow that logic. Newer SBA rules expect that someone requesting small business purchase loans will be able to demonstrate, with his or her resume, specific experience needed to operate the business successfully.6. Business plan: Another way for the borrower to show he or she can successfully manage the target company is by providing a plan to operate the business. It should include specific strategies for building up the enterprise, increasing revenues and boosting profits. A marketing plan should also be included. And the budget projections included in the plan need to clearly describe how the borrower expects to generate enough money from the business on a consistent basis to make the loan payments.While it's easier for California entrepreneurs to secure small business purchase loans than it was a couple of years ago--at least the money is available--it takes some know-how, and a considerable amount of work, to raise money with a successful loan application for one of the Sba loan programs.

Short Sales, Foreclosures and Sba loan Default

For thousands of business owners, the failure of a business means more than just closing the doors and walking away. It also means dealing with the emotional anguish of having a piece of real estate forcibly taken from them by their lender. For many people, this is a confusing and stressful process. The purpose of this article is to explain how short sales work, what's involved, and factors that play into a successful short sale.First, let's discuss what a short sale is. Simply put, a short sale is when a piece of real estate sells for less than the amount owed to the bank. This has become quite common in the residential sector, and has also become more common on commercial properties. To further drive home the meaning of "short sale", let's look at an example:Bob's Widget Factory Inc owns a piece of commercial real estate that they purchased in 2008 for $1,000,000. In order to buy the real estate, Bob took a $900,000 loan. Before Bob could blink, the economy went south and the business went belly up. In order to make good on his obligation despite his failed venture, Bob decides to put his building up for sale. To his dismay, the local real estate market has weakened, and the best offer he has received for the building is $700,000. Bob has found himself in a classic short sale situation. He owes $900,000, but the most the building will sell for $700,000, Now what?In order for any short sale to be successful, first and foremost, ALL the lien holders must agree to release their liens. This means not just the first lien holder, but the 2nd, 3rd, 4th etc. Why is this the case? Here's why: Because a short sale is a voluntary sale, therefore all the lien holders must agree. Contrast this with a foreclosure, which is a forced sale. In these cases, not all the lien holders need to agree. In the example above, if the 1st lien holder were to foreclose, all the remaining lien holders would get "wiped out", which means all the remaining lien holders lose their lien on the property.Some other factors to consider when contemplating a short sale:- A successful short sale typically does not mean you are off the hook for the deficiency (ie the money you still owe to the bank), so a settlement (OIC) will be needed.- The OIC cannot be done in conjunction with the sale of the real estate. The settlement comes only after all business assets have been liquidated.- The more liens there are on a property, the more difficult a short sale is to accomplish.- Some lenders will allow a portion of the proceeds to go to more junior lien holders, while others who are in 1st position will foreclosure instead of sharing the proceeds from a short sale with junior lien holders.Overall, short sales have become a way of life in today's economy. No matter what side of the deal you are on, be prepared for a transaction that will take longer and cause more headaches than "regular" transactions due the fact that there are typically more players involved.

Shaw Capital Guide to Interest Free SBA ARC Loans for Debt Relief

Shaw Capital Management and Financing - Avoid debt and interest scams. Recovery Act Emergency Loans to $35,000 for Small Business. If your small business is struggling to pay debts, you may qualify for a new type of interest-free loan in amounts up to $35,000, guaranteed by the U.S. Small Business Administration. The temporary emergency program, called America's Recovery Capital, or ARC, was authorized under the economic stimulus law passed earlier in the year and is now being launched by the SBA. For borrowers, ARC loans will be interest-free, and with no SBA fees attached. But as with all SBA financing programs, the ARC loans will be made by private, commercial lenders, not SBA directly. Lenders, of course, won't make loans for free, so the SBA will pay lenders monthly interest on the ARC loans on your behalf. And that's basically free money for you and a good chance to get a little breathing room if you're facing burdensome debt payments.ARC loans are deferred-payment loans available to established, viable, for-profit small businesses that are suffering hardship right now and need short-term help to make principal and interest payments on existing debt. These loans are interest-free to the borrower (you), and 100 percent guaranteed by the SBA. Shaw Capital Management and Financing - Here's How it Works. In addition to the loans being zero interest and fully guaranteed by the government, you don't have to make any payments until a year after you receive the last of the funds, which will be disbursed within a period of up to six months. After the initial 12-month payment-free grace period, you'll have five years to pay it off. Banks and other financial institutions that make small business loans should have information on the program available soon, and it will be up to them whether or not to participate. Meanwhile, details and updates on the program will be available at the SBA's special Economic Recovery Act website at http://www.sba.gov/recovery. Keep in mind that proceeds from an ARC loan must be used specifically to make payments of principal and interest on existing business debt. But that includes a wide range of different types of loans, leases and lines that you might have.Here are the types of debt that will qualify: 1. Commercial mortgages on a building or property that your business owns.2. Conventional term loans, including secured and unsecured.3. Revolving lines of credit.4. Capital leases.5. Credit card debt.6. Notes payable to vendors, suppliers and utilities.7. First mortgages loans under SBA's 504 Development Company Loan Program.8. Any SBA guaranteed loans made after Feb. 17, 2009 (but not SBA-backed loans made prior to that date). For many business owners, paying down high-interest credit card debt would be the best use of ARC funds. But you will have to prove that the debt was incurred for specific business purposes, and the documentation requirements to use ARC funds for credit card debt could be stringent.The loan application process, however, is designed to be rather quick. Once lenders submit the application, SBA is promising turnaround within 5-10 business days. The "Viable" Business StandardThe key to qualifying for and receiving an ARC loan is whether your business is considered "viable" and is facing "immediate financial hardship." While the standards don't seem to present a major hurdle for existing businesses that have had success in the past, the viability measure might rule out newer businesses that haven't turned a profit. And ARC loans are specifically not intended for startups.Here's how the SBA defines "viable" for getting one of these loans:"A viable small business is one that has been profitable in the past, but is just beginning to struggle with making loan payments, and can reasonably project that it can get back on track with the infusion of ARC loan funds and the benefit of deferred payments."Examples of financial hardship offered by the SBA include declining sales or revenues, or difficulties in paying the operating expenses of the business. ARC loans will be available through SBA-approved lenders as long as the money holds out, or through September 30, 2010. Daniel Kehrer is Editor and Director of Content Development for Business.com, and write the What Works for Business blog.

SBA Real Estate Loans Explained

Structure of the SBAThe SBA is an independent agency that operates under the authority of the Small Business Act of 1953. The secretary of commerce delegates small business responsibilities to the SBA. The organization and management of the SBA consists of an administrator and deputy administrator, who are appointed by the president and approved by Congress; field office directors; and administrators for the various program areas. The SBA also has associate administrators for the following offices: Disaster Assistance; Field Operations; Public Communications, Marketing, and Customer Service; Congressional and Legislative Affairs; Equal Employment Opportunity and Civil Rights Compliance; Hearings and Appeals; and Management and Administration. There are also associate administrators for Investment; Small Business Development Centers; Surety Guarantees; regular Government Contracting; and Minority Enterprise Development. Assistant administrators handle International Trade; Native American Affairs; Veterans Affairs; Women's Business Ownership; and Size Standards, and Technology. There is an associate deputy administrator for Government Contracting and Minority Enterprise Development. These offices are then the backup and resource for over 68 field offices that administer the programs and monitor loans. The Inspector General Office audits and maintains the integrity of the loans and the SBA programs. What are Sba loan programs?The most visible elements of the administration are the loan programs it administers. The SBA itself does not grant loans with the exception of Disaster Relief Loans. Instead, the SBA guarantees against default certain portions of business loans made by banks and other lenders that conform to its guidelines. Disaster Relief Loans are issued directly from the SBA. Contrary to popular belief, these programs are not generally for persons with bad credit who can't get bank loans, nor are they primarily used for startup funding; rather, the primary use of the programs are to make loans for longer repayment periods and with looser affordability requirements than normal commercial business loans. Also, a business can qualify for the loan even if the yearly payment would be the same as the previous year's profit, whereas most banks would want payment for a loan to be no more than two-thirds (2/3) of the prior year's profits for a business. The lower payments, longer terms and looser affordability calculations allow some businesses to borrow more money than they could otherwise.One of the most popular uses of Sba loans is for commercial mortgages on buildings occupied by a small business. These programs are chosen because most bank programs, while having similar payments and rates, require borrowers to refinance every five years.Types of Guaranteed Business Loans through SBA Lending institutions include:•Loan Guarantee Program: The 7 Loan Guarantee Program are designed to help small entrepreneurs start or expand their businesses. The program makes capital available to small businesses through bank and non-bank lending institutions.•504 Fixed Asset Financing Program: This program provides funding for purchasing land or construction. Of the total project costs, a lender must provide 50% of the financing, a Certified Development Company provides up to 40% of the financing through a 100% SBA guaranteed debenture, and the applicant provides approximately 10% of the financing.What is SBA Basic 7(a) Loan Program?7(a) loans are the most basic and most used type loan of SBA's business loan programs. Its name comes from section 7(a) of the Small Business Act, which authorizes the Agency to provide business loans to American small businesses. All 7(a) loans are provided by lenders who are called participants because they participate with SBA in the 7(a) program. Not all lenders choose to participate, but most American banks do. There are also some non-bank lenders who participate with SBA in the 7(a) program which expands the availability of lenders making loans under SBA guidelines. Remember Sba loans are only for owner occupied real estate refinancing and purchases.

SBA's Patriot Express Pilot Loan Initiative Delivers Nearly $500 Million to 6,000 Veterans, Military Community

July 1, 2010 -- In just three years' time, the U.S. Small Business Administration's Patriot Express Pilot Loan Initiative has supported nearly $500 million in Patriot Express loans to small businesses owned and operated by veterans, reservists and their spouses. Patriot Express loans, which can be used to start or expand a small business, increased over the past two years due in part to the American Recovery and Reinvestment Act [ARRA], which raised loan guarantees to 90 percent, and temporarily eliminated fees for borrowers on all Sba loans. To date, more than 6,000 loans have been made. Patriot Express was launched June 28, 2007, to expand upon the nearly $1 billion in loans that SBA guarantees annually for veteran-owned businesses. SBA also offers counseling assistance and procurement support each year to more than 200,000 veterans, service-disabled veterans, reservists and members of the National Guard. "America's veterans have the leadership skills and experience to become successful entrepreneurs and small-business owners," said SBA Administrator Karen Mills [pictured]. "As we celebrate Independence Day, we renew our commitment to more than 26 million veterans and service members across the country -- including the thousands returning from Iraq and Afghanistan. The Patriot Express initiative, in conjunction with other SBA programs, puts more capital and more tools in the hands of veterans as they grow their businesses and create the jobs America needs." Patriot Express is a streamlined loan product based on the agency's highly successful SBA Express Program, but with an enhanced guaranty and interest rate. Patriot Express loans are offered by SBA's network of participating lenders nationwide, and features one of SBA's fastest turnaround times for loan approvals. Patriot Express loans are available for up to $500,000. The Patriot Express loan can be used for most business purposes -- including start-up, expansion, equipment purchases, working capital, inventory, or business-occupied real-estate purchases. Local SBA district offices can provide lists of Patriot Express lenders in their areas. Details on the initiative can be found at http://www.sba.gov/patriotexpress. Patriot Express is available to military community members -- including veterans; service-disabled veterans; active-duty service members participating in the military's Transition Assistance Program; National Guard and Reservist members; current spouses of any of the above; and the widowed spouse of a service member or veteran who died during service, or of a service-connected disability. The average Patriot Express loan amount is almost $82,000; nearly 15 percent of those loans have gone to military spouses. After a loan application is approved by a commercial lender, it is submitted to SBA for approval. Most applications are approved by SBA within 24 hours. Additionally, SBA has entered an agreement with six major universities to expand and deliver entrepreneurship training for service-disabled veterans of the wars in Iraq and Afghanistan, in a program called Entrepreneurship Bootcamp for Veterans with Disabilities [EBV]. For more information go to http://bit.ly/WhitmanEBV. SBA also offers business counseling through veterans' business development officers in district offices in every state and territory, to provide access to SBA's range of programs and services. SBA recently expanded the Veterans Business Outreach Centers to 16 locations. They're listed at http://bit.ly/VetsBiz. In addition to district offices, SBA's resource partners -- including SCORE, Counselors to America's Small Business, an expanded Small Business Development Center program for veterans, and Women's Business Centers [WBCs] -- provide local and online assistance with: writing a business plan, financing options to start or grow your business, managing the business, expanding the business, and selling goods and services to the federal government. The agency, along with other federal agencies, recently entered a joint agreement to help Native American/Alaska Native veteran-owned businesses with an entrepreneurship education program at the Tuck School of Business at Dartmouth. For those who are already small-business owners and who expect call-up, the SBA and its resource partners can help with preparing their businesses before deployment, managing their businesses, selling goods and services to the government, obtaining other SBA financing and financial assistance, and obtaining loans for economic injury via Military Reserve Economic Injury Disaster Loans [MREIDL]. Loans of up to $2 million are available for small businesses sustaining economic injury because an owner or essential employee has been called to active duty as a military reservist. The SBA and its Office of Veterans Business Development [OVBD] provides comprehensive assistance, outreach and support to veterans. Each year, SBA helps more than 200,000 veterans, service-disabled veterans and reservists. To learn more about additional opportunities for veterans available through the SBA, please visit http://bit.ly/VetBizDev. SOURCE: U.S. Small Business Administration###TAGS: Karen Mills, military reservists, OVBD, Patriot Express Loans, Patriot Express Pilot Loan Initiative, Recovery Act, SBA, service-disabled, small business, small businesses, veteran-owned, veterans, 4th of July, Afghanistan, America, ARRA, counseling, create jobs, dependents, EBV, economic development, economy, Entrepreneurship Bootcamp for Veterans with Disabilities, federal contracting, financing, Fourth of July, Independence Day, Iraq, job creation, Karen G. Mills, Karen Gordon Mills, Military Reserve Economic Injury Disaster Loans, MREIDL, National Guard, Office of Veterans Business Development, operating capital, procurement, Recovery.gov, reserve component members, SCORE, SDVOSB, service-disabled veterans, survivors, training, Tuck School of Business at Dartmouth, U.S., United States of America, VBOC, VBOP, Veterans Business Development Officers, Veterans Business Outreach Centers, Veterans Business Outreach Program, WBCs, Women's Business Centers, working capital

SBA Mortgage Enabling You To obtain The Loan You Need

Finding an SBA mortgage could be the most beneficial factor for you personally if you are a little business, specially a small businesses beginning out, and you are getting trouble being ready to obtain a mortgage. Quite a few occasions, loan providers see small companies as too risky of a business deal because it can be hard for them to determine the chances in the company becoming in a position to be successful. This is where Sba loan agencies phase in to support. SBA (modest small business administration) mortgage companies are independent companies which are branched off from the federal federal government that assist modest companies get the loans they have to have that they wouldn't be able to get for on their own. Consequently, by going by means of these companies to get a mortgage, you might be much much more most likely to obtain the mortgage you need if you ever can't get one in your personal. These companies perform with loan companies by making ensures towards the loan providers, such as guarantees really should you default about the loan. These guarantees help the loan companies really feel more comfortable giving you the loan you'll need for the little company. But, it's the loan companies that nonetheless lend out the funds, and thus, you must still impress the lenders to a certain diploma as a way to get the mortgage. As a result, you should nevertheless present a good company plan and presentation. Though your probabilities of acquiring the loan are greatly increased in case you use a lender that works via an Sba loan company, it will nevertheless be especially essential that you simply put together yourself the most effective you are able to. SBA companies will even be willing to operate with you as well as the loan companies to help you together with your company plan, provide you with ideas, together with recommendations, and anything else you might want aid with.Although SBA agencies significantly boost your chances of being capable to obtain the mortgage you need, you will find still some drawbacks. The process of obtaining the loan you need will take significantly longer since the federal government will probably be involved, which will imply more paperwork too. Don't expect to pay a reduced interest rate either because you're going via an Sba loan agency, the fact is, you may wind up spending a greater interest rate according to the loan company, and in case you are a minority, do not expect to get special therapy. There's a lot of sites which offer you lists of loan providers that operate through Sba loan agencies. It'll be necessary to perform your study before determining which financial institution will likely be the most beneficial for you since each loan provider is unique, and offers with unique circumstances differently.Another drawback of heading via an Sba loan agency is the fact that probabilities are, you may not get all your funds all at once. Then again, relaxation assured that you may have enough income for your wants. SBA companies often only give out income as you need it. In fact, a whole lot of the cash may well come within the form of reimbursements. Even so, there are actually not limits on what you could have in case you really need to have it. A tiny Sba loan is going to be anywhere from around $5,000 - $50,000. A large Sba loan will probably be anyplace from around $1 million to an unlimited amount. As a result, you'll not be restricted on how much you'll need.

Sba loans What You Need to Know

Many of our start up business clients at www.Ethos360.com come to us with basic questions on how to get financing from the SBA. There are a few things to have in your back pocket (and on the tip of your tongue) before going to them in order to increase your chances of getting approved. 1. Know your business inside and out.You will need a business plan that not only covers all of the details of your business idea, but is also devoid of unnecessary embellishment and hyper extended financial projections. The SBA wants to know what you're doing and how you're going to do it. Also, they want to see evidence that you are qualified and capable of executing the tasks outlined in your business plan. The Management Summary of your business plan should detail your experience or at least the experience of the people you'll have on hand to make up for any lack of qualifications you'll have. 2. Show that you have invested in yourself and your business.This seems like an obvious requirement, but a surprising number of people come up against a wall when faced with this. The SBA is not a zero percent down financing solution. You will have to show that you have invested a good sum of your own money, time and effort into the business in order to get the SBA to put up the loan. The SBA will not underwrite 100% of the venture so this means that you will have to not only have collateral for the loan, but will be providing evidence of having previously invested at least 25% to 50% of the asking amount in the business. 3. Understand that the SBA will examine your asking amount and prepare.The SBA is very concerned and interested to know where the money you're requesting will be going. Being prepared with a breakdown of future spending along with brief explanations as to what the money will be used for will help the SBA determine the level of your asking amount. Approaching a loan officer and just saying, "I'll be needing $100,000, please" will not work half as well as illustrating in detail what that $100,000 will do such as: "I'll need $50,000 for a new truck, $20,000 tenant improvements on a new office space, $10,000 for working capital, and $30,000 on upfront rent on an office space." Keep in mind that a business that has been in existence for more than a year has a better chance of getting an Sba loan than a start-up. There are many more tips and tricks to help increase your chances at getting funding from the SBA. It may seem a little daunting for a first timer to gather their ducks in a row, but there are many low cost ways to prepare you. Small business coaches and mentors can help a great deal with putting together what you need to help your business get financing. Don't be afraid of approaching the SBA, they're there to help.

Sba loans For Small Business

Copyright (c) 2010 James AaronMany small business owners have considered financing their business at some point in time in their life. You may have considered growth, buying modern equipment, extra inventories, purchasing real estate or just looking for a fresh capital injection. The confusion surrounding Sba loans may bewilder or frustrate even the most intelligent capitalist. Conflicting information from your trusted advisors or the internet might not assist to bring you closer to separating actuality from myth. There is much misinformation surrounding Sba loans. Some of this misinformation is major and intense enough to frustrate a small business owner from expanding and getting out from under a cloud of debt or even staying open for business. Understanding how a Sba loan works and how to successfully obtain one for your organization is a case of determining what is true and what is not true. You might see yourself in many of the following misperceptions of Sba loans. By the time you finish reading this article you will be better informed and in possession of the essentials. The truth regarding Sba loans can help you to be a better and more successful small business owner.The U.S. Small Business Administration (SBA) was founded in 1953 as an independent agency of the federal government to aid and assist as well as counsel and guard the interests of small business concerns. Another goal of agency was to preserve free competitive enterprise and to sustain and strengthen the overall financial system of our country. The SBA acknowledges that small business is a vital part of the United States economic recovery and strength. Building America's future and helping the United States compete in today's global marketplace is major importance. Although SBA has developed and evolved in the years since it was established. The SBA helps citizens of Americans start building and growing business. Through an extensive network of field offices and partnerships with public and private groups the SBA delivers its services to the people throughout the United States, Puerto Rico as well as the U. S. Virgin Islands and Guam.Although all banks are subject to the same SBA Guidelines, the rules are subject to diverse interpretations with respect to analyzing a specific loan request. Some lending institutions could be willing to take greater risks. Several banks usually wish to take a more optimistic evaluation of the data and your business' future success. Therefore, choosing the top bank for your Sba loan needs can make the difference between loan approval and denial. Loan pricing and structure can vary substantially at numerous banks. Interest rates on Sba loans are based on the prime rate plus a margin. Many banks are extra competitive in price to be leaders in SBA lending. Some banks will carve out a provision for accounts receivable and supply financing from their loan terms to allow for additional third party commercial financing in addition to the Sba loan. For the same loan some financial institutions will require additional collateral guarantees such as a lien on your house. Evaluating the sufficiency of such added collateral guarantees is also subject to interpretation.A good experienced commercial banker can help you with the ins and outs of securing a Sba loan. Keep in mind loans are not governmental grants. Loans have to be paid back. Be sure to keep up your payments and terms so that you can get future loans. Sba loans can be the perfect seed money you need to bring your visions into reality.

Sba loans is Smart Choice For Business Recovery

Sba loans are one of loan facilities given by United State government in order to help small business that has financial difficulty. Sba loans generally supports some small business company by providing loan in order to recover financial condition which usually caused by great loss or unprofitable business as well as disaster. Sba loans proved to be a good way to help small businesses back in their track again, and borrowers are able to continue their business in order to be more productive and generate some profit as well as giving protection to their employee from getting terrible experience of loosing the job. That's one of the reason why US government willing to provide sba loans, it is not only to keep and make the nation economic become stronger by supporting small businesses so they can continue to maintain a healthy cash flow but also to give secure economic state to some productive citizen and at the end of the day it will reduce the total percentage of unemployment in that country.Sba loans was started in 1953, although 1996 there was a moment where sba loans almost eliminated but fortunately it managed to survived up until today. Even though during its existences, some budgets are being reduced or even removed from sba loans, but as we recognize today, it still give huge contribution to economic development in general.Sba loans are not directly handled by small business administration which is a government agency. Some particular financial institutions, generally is a commercial institution like bank provide sba loans and directly linking with people who require to get the service. The fund used for Sba loans is also come from financial institution or bank but small business administration will give guarantee to certain percentage of money used for Sba loans if borrowers should be in situation where they are not able to secure the payment. Optimistically, with this guarantee given by small business administration, financial institutions or banks are willing to give their full support to some prospective lenders to get Sba loans without any hesitation.There are some rumors that it's a lot more difficult than they think to be entitled for Sba loans compare to other loan provided by financial institution. But as long as borrowers follow instruction given by financial advisor or small business administration, there is always a chance to get the approval.In order to be considered that borrower is entitled to get Sba loans, there are some requirements set by small business administration that have to be prepared. First of all, borrowers have the experience of being rejected for their previous loan application by other financial institution, borrowers should run a profit oriented business and the business should take in place within United State area, business holder should hold realistic assets to be spent for business investment and had some effort to get fund either from personal or banks before he applied for sba loans, borrowers should hold plan on how to secure the sba loans because payment period set by small business administration is between five to twenty five years, and there are still other requirements that can be seen on small business administration office or official site. The important thing before borrowers start to apply for sba loans, they have to prepare requirement needed and make sure that they have their plan or budget set for their business in the future.

Sba loans and Life Insurance

It seems that very few business owners realize that applying for an SBA or business loan often requires that a life insurance be in place before the loan can be approved. Once that need is recognized, the process can either be fast and painless or grueling and, at times, even impossible. We hope some of the tips below will help you avoid potential mistakes business owners make in the process of applying for the needed life insurance.First thing first, what plan do you need? Most lenders only require that you get a 10 year term life insurance plan. Meaning that the insurance only has to have rates guaranteed for 10 years (as opposed to 15, 20 or 30 years) and does not need to be convertible. Premium wise, that is a good thing as a ten year term is cheaper than the longer plans or a whole life.Some may wonder if they should use their present life insurance as collateral for their Sba loan or business loan. Although the lender may not care if you do that, your beneficiaries may not feel the same way. Keep in mind that, if you decide to collateralize your present insurance policy, the lender has full control of the policy and becomes the first to decide what happens to the money paid if you die. Rather, we do recommend that you take out a policy specifically for your business loan. Besides, if you do get a life insurance policy specifically for the loan, you may be able to claim the policy as a business expense on your taxe return (consult your accountant to make sure).Once you decide to apply for a loan specific life insurance policy, which way should you go, exam or no exam? That question really depends on many factors. Primarily, you need to consider your present or past health history. If you are in great health, then many options are open to you. If you do have some minor or major health issues, then the process may or may not be more complicated. Keep in mind that, when your health is not 100% or close to it, the process of underwriting may take on average 6 weeks (as long as 4+ months sometimes). You may wonder why it takes so long. Well, more often than not, the insurance company will request medical records. And needed medical records can bring everything to a halt. Most medical offices are not in a hurry to process the medical record request and if your Dr. is not in a hurry to send the insurance company your medical records, then underwriting cannot proceed. That is besides the fact that the Dr's office has just been paid as much as $300+ for your records. Now, there may be ways to accelerate the process. And if you do have medical issues and need the life insurance coverage fast, we highly recommend that you select an insurance consultant that has the needed experience to get things done as fast as possible.What if you have no medical issues? It would seem that, if you are healthy, the response should be very fast and the rates very low. Well, that is a possibility but not always the case. Remember, if you want some of the lowest insurance rates available, you still need to get a medical exam. We strongly do not recommend that you follow the exam route. Why? Simply because we have seen instances where a healthy, young individual took the exam only to find out that he had a medical issue. The problem was not necessary that he ended up getting higher rates. The problem was that he was declined! Once declined by an insurance company that requested an exam, getting a policy somewhere else (and fast) becomes extremely difficult. When we spoke to his wife, we told her that it was not his fault but he had followed the wrong process. What else should he have done? When you have to cover a business loan or Sba loan, you need the coverage ASAP and with as little risk of decline as possible. What we recommend is that you first secure a NO Exam Life insurance for the amount needed for the loan. I know rates can be higher and amounts available can be lower (some companies only offer up to $250,000 without an exam) but that is still the best way to get what you need fast and with less risk of a decline. By the way, it is possible to get as much as $1,000,000+ in no exam life insurance by using multiple companies. We have never seen that it is a problem. The insurance companies just need to know what you are doing.How about the assignment? That is or should be the easiest part. If you are working with an insurance consultant who is familiar with assignment forms then he/she should know what questions to ask the lender and the insurance company and coordinate the right forms to the lender. You may still need to get involved to make sure that the lender has received the right forms as, at times, the lender will only want to work with you and not the lief insurance consultant.Your loan is now approved, the life insurance is in place and all assignment forms have been processed. Now you can breath again and start working on what is really important to you - YOUR BUSINESS! What can possibly be next. Well, if you are like most people, you will want to see if you can get rid of the more expensive no exam life insurance plan(s) and get lower rates with a new policy. Less worry and no hurry usually means better rates. At this point, and when you can, we recommend that you re-shop the no exam life insurance plan you secured for your business loan or Sba loan and, if needed, do a new Sba loan life insurance plan that requires an exam. Once you have secured new, lower priced life insurance, you should be able to easily cancel the old (higher priced) policy(ies) and assign the new policy to the lender. Of course, If you originally secured a life policy with an exam and received very low rates, then you are all set and no need to re-shop. If you secured the life insurance policy with an exam but your health was not so great, and the rates you received seemed high, then we suggest that you re-shop the insurance plan about once every 18 months. With impaired health life insurance many factors can influence future premium changes and I would not want you to miss out on potential savings. I could get into more details on impaired health life insurance but that is for another article.To recap, when you apply for your business or Sba loan, make sure to ask if a life insurance policy will be needed. The point is, the sooner you start looking, the better. Next, apply for a no exam life insurance. Then, get all assignment forms in place. Last, once the loan is all set, re-shop for your life insurance as needed.We hope this information has been helpful. No mater who you hire to help you with the insurance needs,as we say in all of our articles, ask, ask and ask many questions before you apply, during the underwriting process and after you have your policy. Be well.

Sba loans and Working Capital Loans When to Fire Your Banker

For most small business owners, the idea of firing their banker has probably never occurred to them. Most of us would like to view our banker as one of the family. In the world of Sba loans and working capital financing, the average business owner is happy to have one less decision to make, so thoughts of "when to fire your banker" rarely become a high priority.Banks are just not what they used to be (as most of us have by now realized). It seems like almost overnight banks have lost most of our confidence in a way that is similar to many automobile manufacturers that are now a shriveled and tarnished version of what they once were. In this shifting reality, business owners are now forced to adapt quickly to a changing environment for small business loans. Candidly speaking, even if their commercial banker is their best friend, small business owners are increasingly realizing that they must look out for their own best interests because it is unlikely that their business banker is up to the task anymore.While this assessment might seem cold and harsh, it is nevertheless a candid and practical evaluation of current circumstances. Unwinding a long-term relationship with a particular bank or banker is likely to produce some of the same trauma that occurs when any positive relationship suddenly goes sour. In such circumstances, we should try to move forward after doing the best that we can. As in any change-related decision, the decision-maker (in this case, the business owner agonizing over the firing of their banker) should openly evaluate the probable consequences of not changing at all. If they are being truthful to themselves, most business owners will conclude that they should seek a new banker if keeping the old banker is holding the business back, either by bad advice or inadequate small business loans.This discussion is in no way meant to suggest that all banks are now bad or that all bankers are now bad. In today's complex economy, there are still good banks as well as bad banks. Of course there are similarly both bad bankers and good bankers. When their current banking relationship involves a bad banker working for a bad bank, this is probably the worst-case scenario to confront for most commercial borrowers.We will leave the discussion of good banks and bad banks to another report. Business owners should consider the following remarks when determining if it might be time to find a new banker.Overall we would conclude that if the current situation involves a bad bank and a not so bad banker, the most prudent outcome for a business owner is likely to be firing both the bank and the banker. Simply by working for a bad bank, a good banker can often be transformed into a bad banker. Many banks have suddenly stopped making normal business loans and working capital loans, often without even explaining why. This can force an otherwise good banker to rationalize the actions of the bank in a way meant to keep the business owner as a customer while at the same time asking them to accept sub-par business financing. Just say no.One of the most predictive signs of a bad banker is an increasing frequency of situations in which they are unable to achieve the results which were promised or suggested. This could include lowering a business line of credit after suggesting that it would either be increased or held at the same level. Another common illustration is based on circumstances in which the banker reports that they recommended a commercial loan for approval but the bank loan committee turned it down. Business owners should not be reluctant to hold their banker accountable for producing inadequate results, since results are what count for any business. For prudent commercial borrowers, firing your banker and your bank has become both a more acceptable and necessary solution when your business is not able to obtain sufficient business finance and working capital help.

Sba loans �" Getting Approved Quicker

The Small Business Administration is a funding lifeline for millions of small businesses in America. If you are looking for business funding in even a brutal market, the SBA should be your first stop.Though the SBA can provide a great helping hand, they can be equally frustrating with their long processing times. However, there are ways in which you can make it easier for the SBA to review and approve your business loan application a lot quicker than usual.1. Provide updated financial records - The SBA will want to see good financial statements for both the past as well as the projected future. You should prepare cash flow statements, income statement and balance sheets for at least the past three years and also include projected financial statements for the next two or three years. Also, make sure to include the tax returns of the past three years as this is definitely required by the SBA. Providing strong financial statements in your business plan is one of the best ways to speed up your loan application process. These figures are hard numbers that can be used in any evaluation.2. Apply at banks that already have a working relationship with the SBA. Some banks refrain from working with SBA backed applicants as they are not really obligated to approve an application just because it is backed by the SBA guaranty. However, some banks will have a good working relationship with the SBA and your best bet would be to apply at one of those banks that will give weight to the SBA guaranty that you have already attained.3. Do your research on a lending institution - You will have to take some time off to research the lending institution you plan on approaching. Look for those that have already granted loans to businesses that are similar to yours. It is highly unlikely that a bank will grant a business loan to a new type of business that they have not dealt with in the past.4. Apply at many banks - Just like the college application process, you will always need a fall back when it comes to business loans as well. Apart from applying at your preferred lending institution, you should apply at a few others. That way, you will still have a chance of getting approved by other banks if the one you were counting on disapproves your loan application.5. Seek assistance - You can always try to have somebody push your application along. Visit your local SBA district officer to discuss ways in which you can speed up your application process. He or she might be able to help you with a couple of crucial tips. This is particularly true if the local office is very familiar with a particular bank.Sba loan guarantees are worth their weight in gold these days. The economy may be slowly recovering, but banks are still highly risk adverse. An SBA guarantee limits their risk, making your loan request much more likely to receive approval. That is, of course, your ultimate goal.

Sba loans Not All Are Lenders Are The Same

A major misperception among business owners, regarding Sba loans is that they are all the same. Meaning, most business owners have the perception that all of the terms, processes and eligibility requirements are identical from one bank to the next. Although understandable, this simply is not the case. There are many innovative lenders and banks that use the SBA guarantees to come up with some very interesting loan programs that can be a major benefit and or solution to business owners seeking commercial mortgages.The SBA has received a bad wrap over the years due to its seemingly complicated and bureaucratic process. The assumption that many entrepreneurs have made boils down to that the SBA is basically just difficult to work with. Although true that the SBA does add on to the underwriting process, the key is to work with a lender that is an expert at dealing with the SBA guidelines, processes AND is set up as a national PLP (Preferred Lending Partner). Working with a bank/lender that only dabbles in Sba loans is a huge mistake and you will pay for this in time, frustration and money as the process goes on and on. You want a lender that specializes in Sba loans - this cannot be overstated.The presumption that all Sba loan programs/terms are the same is also wrong. For example, we do a lot of business with a SBA preferred bank that has many unique products that are guaranteed by the SBA. For example, they offer a 7a program that is fixed for 5 years and amortized over 25 years - the typically 7a loan adjust once per quarter. Further, this particular programs rate is simply PRIME - not PRIME plus 1-2.75%. The bank also absorbs the 2.5% guarantee fee that the borrower normally has to pay. So, even though your local banks may all offer the same vanilla programs, there are more options out there. As far as eligibility, most corner banks that work with the SBA have the typical underwriting guidelines - minimum 680 fico scores, 2 years minimum business existence, borrower liquidity requirements, debt coverage ratios of 1.2, etc. This is also an area that some source choice to get innovative on. Another lender we work with will fund borrowers with scores as low as 500, will work with companies with DCR as low as.9 if the rest of the file has merit.So, not all SBA lenders are the same.

Sba loan, Vital Tips On How To Get It

When you want to start a business or are looking to expand on an existing one, there are many ways that you can achieve this even if you do not have adequate funds. There are many loans available to help you from banks and other lending institutions. You can even source the funds from private lenders. This may not always be to your advantage and you may have to approach other agencies in order to get money. There are government funded programs that can help you access the funds that you need. The Small Business Administration (SBA) loans are there to give small business owners a chance to grow or start a business. There are numerous programs that are there to help you but you must know what is required so that you can improve your chances of securing this type of loan. For you to be eligible for an Sba loan, you must have been turned down by a private financial institution. You have to have a formal denial from the lenders so that you can proceed with the application process. A well constructed business plan is an important aspect of the Sba loan application process. The information that you put here will let the lenders know what and how you intend to use the money. It should also describe by the purpose of the business, the business structure and the length of time it has been in operation. You also need to have some financial information of the business plus all the individuals who own at least twenty percent of the business. Tax statements for the last three years and your profit and loss statements for the next two years based on realistic sales from the last three years will also be required. It is also important that you have a complete detailed resume that covers all the relevant experience. Take your time when preparing the required documents when you want to increase your chances of getting an Sba loan.

Sba loan Requirements �" The Basics

Before you start your own small business of your own, do proper research and analysis about the market, the demand of the services or products in the market and the reasons for failure by many other related industries. The next step is to make strategy to make your industry run smooth and make profits. After the homework, you have to think about getting financial aid that can support your company in all forms. You can always opt for Small Business Administration loan. However, for that you have to be aware about the basic requirements and eligibility criteria to avail the SBA business loanThere is no need to get tensed as if you are a citizen of the USA and if you are going to operate or already operating your business from the land of the USA using labor, raw materials and other accessories from the nation then you are eligible to get the financial support. The qualification standards of Sba loan are flexible in comparison to other business loans. The officers may usually ask you some general questions to get information about you and your past records.One company or industry has to follow the below mentioned documentation in order to evaluate the loan application:Business Profile - It is a document that describes the business type, number of staffs working, annual sales, the tenure of business and ownership.Loan Application - This application describes how the funds will be used. This request form must include the amount, purpose and the kind of loan.Collateral - This is to offer the security of the financial aid that includes equity in the business, cash available and borrowed funds.Commercial Financial Statements - It is required to complete all the financial statements of the previous 3 years and the present interim financial statements.Personal Financial Statements - This is a statement that includes all the information of the owners, officers, partners and shareholders holding 20% & more of the business.The accuracy and strength of the statements play a pivotal role to make lending decisions for the officers who review all these along with the application.Your financial statements should include all the balance sheets of the previous 3 fiscal years, income statements that reveal the company profits or losses for the previous 3 fiscal years, cash flow projections that indicate how much cash you have to generate to pay back the business loan.The personal statements also include all the information related to personal liabilities, assets, monthly payments and income tax returns for the previous 3 fiscal years.Before you start your own small business of your own, do proper research and analysis about the market, the demand of the services or products in the market and the reasons for failure by many other related industries. The next step is to make strategy to make your industry run smooth and make profits. After the homework, you have to think about getting financial aid that can support your company in all forms. You can always opt for Small Business Administration loan. However, for that you have to be aware about the basic requirements and eligibility criteria to avail the SBA business loanThere is no need to get tensed as if you are a citizen of the USA and if you are going to operate or already operating your business from the land of the USA using labor, raw materials and other accessories from the nation then you are eligible to get the financial support. The qualification standards of Sba loan are flexible in comparison to other business loans. The officers may usually ask you some general questions to get information about you and your past records.One company or industry has to follow the below mentioned documentation in order to evaluate the loan application:Business Profile - It is a document that describes the business type, number of staffs working, annual sales, the tenure of business and ownership.Loan Application - This application describes how the funds will be used. This request form must include the amount, purpose and the kind of loan.Collateral - This is to offer the security of the financial aid that includes equity in the business, cash available and borrowed funds.Commercial Financial Statements - It is required to complete all the financial statements of the previous 3 years and the present interim financial statements.Personal Financial Statements - This is a statement that includes all the information of the owners, officers, partners and shareholders holding 20% & more of the business.The accuracy and strength of the statements play a pivotal role to make lending decisions for the officers who review all these along with the application.Your financial statements should include all the balance sheets of the previous 3 fiscal years, income statements that reveal the company profits or losses for the previous 3 fiscal years, cash flow projections that indicate how much cash you have to generate to pay back the business loan.The personal statements also include all the information related to personal liabilities, assets, monthly payments and income tax returns for the previous 3 fiscal years.

Sba loan Modification; Not The Way To Go;

I recently read an article by a consulting firm about how an Sba loan modification is not the way to go. Really? In no circumstances would it make sense for a borrower to pursue a loan modification?First of all, let's get our terminology straight. The article was talking about 3 to 6 month temporary payment relief, which is technically a deferment, not a modification. A deferment simply means that payments are deferred, while a modification is a change to the loan terms that typically are in effect for the life of the loan. The most common examples would be rate adjustments or term extensions.Both of these types of modifications can have material impact on the monthly payment for the life of the loan. So again I ask the question: why would this not be a good thing for a borrower? I have helped a number of customers with loan modifications, and because the bank granted a modification, they are in business today. I have a borrower who was granted a modification that lowered his payment from $3,500 to $1,800 per month.My guess is that consultants who don't have the experience with financial statement analysis and modifications prefer to steer their customers away from modifications simply because the consultant can't help them with such a request, and therefore there is no financial incentive for the consultant to recommend such a request. A good workout consultant can talk to you about your situation, and recommend the strategy that works best for you, the client, and not simply steer you towards the strategy that earns the highest fee for the consultant.The article I mentioned earlier goes on to say that the only way to is get a large reduction of debt via their "sophisticated strategy", which usually entails deceiving your bank by selling your business to a friend, or deceiving your bank by starting a new corporation (owned by you are a related party), and selling the assets to that new corporation. In this example "sophisticated strategy" is also know as "fraud". (Note: legitimate debt settlement is possible, but neither of those strategies qualifies as legitimate).So at the end of the day, is a Sba loan modification for everyone? No, certainly not. That said, there are some business owners who would benefit tremendously from a loan modification, and it's just plain wrong for someone to make a blanket statement that a modification is "not the way to go".

Sba loan Modification What If You Are Current;

A woman I used to work with had a sign on her desk that read "If you think nobody cares about you, try missing a loan payment." While meant to be humorous, that little anecdote says a lot about how lenders choose to service their loan portfolio. More and more, SBA borrowers are coming to us after their lender turned them down for a loan modification. The reason for the denial? They haven't missed a payment.Let's look at this from the lenders perspective:If a borrower is current on their loan, then it must stand to reason that the borrower has the money to make their loan payment. If they have the money to make their payment, then they clearly don't have the need for a loan modification or deferment.In today's weak economy, lenders are overwhelmed with loan modification and deferment requests. Due to so many applications flooding the banks, the only logical thing to do is to "take care of" the most urgent requests. In other words, banks are going to put their effort into saving businesses that are on the verge of collapse, with the first symptom of collapse being missed loan payments. Unfortunately, the result of the thinking described above means that borrowers who are current on their loan, borrowers who have sacrificed by cutting costs, employees, and even their own salaries, are getting doors slammed in their face in favor of borrowers who simply give up and stop paying.So what's the solution? Short of actually skipping payments (which is some cases really is the only way to get the banks attention), the best way to demonstrate the need for a modification is through cash flow analysis. In a nutshell, your cash flows need to demonstrate that the business operations are not generating sufficient cash flow to service the debt based on the existing terms. Just because you are making payments does NOT always mean that the business is generating sufficient cash flow, and that point needs to be driven home to your banker. (Note: if you are not comfortable crunching your own cash flow numbers, this is something that Distressed Loan Advisors specializes in).

Sba loan Guarantees Can Help Your Business Expand

The Small Business Administration (SBA) provides loan guarantees, and makes indirect loans to help small businesses. These loan guarantees give lenders a certain measure of security so they feel more comfortable making a business loan, which they might not have made without the loan guarantee, thus allowing many businesses to get loans that they might not have been able to obtain under normal circumstances.There are a number of general qualifications that must be met before a business can obtain a SBA guaranteed loan. They must have some of their own money invested into the business, must have a strong business plan detailing how they will use the borrowed money and what kind of profits the borrowed money will produce, and they must have a good credit score.The SBA has a number of loan guarantee programs for certain kinds of businesses that have restrictions on the amount that can be borrowed, with some of these programs that amount depends upon how the loan money is used, with respect the improving the community and creating jobs. Here are three of the SBAs most popular programs:The SBA 504 Loan Program is a loan guarantee made to purchase assets, such as land and equipment. This loan is a two lender loan that is made by a bank and a Certified Development Company, with each lender sharing part of the risk, it has an upper limit of $4 million, the borrower must put up 10 percent of the loan amount, it is restricted to businesses with less than $7.5 million in hard assets, and less than $2.5 million in net income.The 7(a) Loan Program, another SBA program, is the most widely used SBA guaranteed loan program for start-up and existing businesses with an upper limit of $5 million. This loan can be used for any general business purpose, such as working capital, equipment, and renovation or construction of business facilities, it has a loan maturity of 10 years for working capital loans and up to 25 years for assets purchased with the loan.The 7(m) Micro Loan Program, another SBA program, is a loan program where the loan money comes from the SBA, which they then send to various nonprofit community agencies, such as Community Development Agencies, who then make the actual loans. This program provides small loans of between $5,000 to $50,000 to both small start-up and existing businesses, it can be used for a broad range of business purposes, and those receiving such loans must participate in a technical assistance program administered by the nonprofit agency providing the loan. Moreover, the SBA does have many more loan programs than those covered here that help businesses get loans they would not be able to get otherwise, these programs offer a number of options that are worth exploring for the start-up, expansion and growth of many types of business. You can obtain more information on the various programs offered by the SBA by contacting a Small Business Administration office near you or online at: http://www.sba.gov.

Sba loan Get The Loan You Otherwise Would not Be able to Get!

If you are a little enterprise, particularly a company that is just beginning out, you may possess a tricky time trying to obtain a loan considering that loan providers could see you as being a higher risk enterprise deal. If this can be the case to suit your needs, you could need to search into getting your loan by means of an SBA mortgage company. SBA (small business administration) mortgage companies are independent agencies branched off from your federal government that support tiny businesses get the loan they wouldn't otherwise have the ability to get on their own. These agencies do not lend out the revenue directly, but they function with loan companies so that you can assist guarantee you get the loan you'll need by generating guarantees together with the loan companies, for example ensures should certainly you default on the mortgage. These guarantees help loan companies feel even more comfy about lending you the cash, having said that, it will still be the lender's choice whether or not or not you receive the loan. For that reason, it can be essential to decide on your lender wisely. There's a lot of web-sites online that lists a lot of loan companies that you can opt for from that work via Sba loan companies. If you ever can, it'll be a fantastic idea to get recommendations and referrals from other people considering that each and every financial institution is numerous.Even though there are plenty of benefits to using Sba loan agencies, possibly the greatest benefit becoming the fact you may greatly increase your capacity to obtain a loan, you will discover some negatives as well. The real mortgage method will consider a lot lengthier since the government might be involved. Not merely will it take you lengthier to get the mortgage you'll need, but there is going to be a lot extra paperwork involved too. Also, if you are a minority, do not expect to get unique remedy. You will also not be paying a decrease rate of interest too just simply because you are functioning through an SBA agency. The fact is, you might even wind up paying out a greater rate of interest according to the loan provider. Also maintain in thoughts that you'll probably not get all the money you'll need all at when, despite the fact that you'll be able to relaxation assured that you'll most likely possess an enough amount for the wants. Sba loan agencies commonly only give out revenue as you'll need it, not all at when, and several times the income will come within the form of reimbursements.Despite the fact that one can find some drawbacks through employing an SBA mortgage company, not only will these agencies significantly increase your chances of becoming in a position to obtain a mortgage in the initial place, but they're also willing to assist you to as well because the lenders to be able to assist you to get the mortgage you'll need. Consequently, these agencies will generally be willing to help you together with your small business strategy and presentation, and assist you to with other ideas and suggestions, along with any issues you may have. As mentioned previously, Sba loans will also be certain you've a sufficient amount of funds for your needs. A little SBA mortgage is anywhere from $5,000-$50,000, and a large SBA mortgage is anywhere from $1 million to an limitless quantity! Consequently, there are actually no limits on how much revenue it is easy to have.

Sba loan Foreclosure �" They won’t really take my home, will they

In my experience, there are two events that borrowers fear the most with respect to the repercussions of an Sba loan default: personal judgments and foreclosure on a personal residence. For most, it just wasn't supposed to be like this. When you took that Sba loan, your future was bright and business was booming. When you applied for your SBA 504 or 7a loan a few years back, your lender required you to pledge your home. You didn't love the idea, but at the time you just couldn't imagine a recession this bad. You couldn't imagine a recession would last this long. So you reluctantly agreed to pledge your home, never thinking for a nanosecond that the "F" word would come into play. In the blink of an eye, the stock market sank like a stone and the economy came to a screeching halt. Business slowed, cash got tight, and the worst case scenario became a reality: you can't afford your monthly Sba loan payment. For one reason or another, a deferment or modification didn't come to fruition, and you have no idea if or when you'll ever catch up.As you mull over the plight of your business, your rising credit card debt, and which of your staff you may have to let go, you begin to think about the worst possible scenario: will I lose my home because I defaulted on my Sba loan?Generally speaking, the SBA does encourage lenders to explore all workout options before resorting to foreclosure. If you can pay over time or refinance, you can avoid foreclosure. Of course, both of those options require you to have income. For many borrowers, the business was their sole source of income, so now that the business is defunct they have no ability to make payments (Strike One). To make matters worse, the home has equity in it (Strike Two). Lastly, the borrower has no access to a lump sum of cash (Strike Three). This is the point at which foreclosure can become a real possibility. The reality of the situation comes down to this: if you owe money on your Sba loan, have no ability to repay it, and there is equity in your home, your lender will have no choice but to liquidate the property in order to recover their funds.

Sba loan Default; What Are My Options;

It's not hard to tell when your business is struggling. Month after month, there is not enough money to go around. Month after month, everyone gets paid but you, the person who has sacrificed everything to make this business work. When things start looking really bad, you can't even afford to pay your expenses or your own salary. At some point, you will start wondering if this business of yours is going to make it, or if it's going to limp along for a while, and eventually die a slow death.The purpose of this article is to discuss what options exist for business owners who have defaulted or are on the verge of defaulting on their Sba loan. We will cover your options if you want to stick it out and try to remain viable, if you want to pack it in, and if you just aren't sure what the heck to do.Deferments and ModificationsIf your business is struggling to meet your debt obligations, but you firmly believe that you are the victim of a temporary economic lull that the business will ultimately recover from, your best chance for relief is either a loan modification or a loan deferment. Lenders and the SBA will consider granting a modification/deferment to borrowers who they deem to be worth helping. A few factors that your lender will taking into consideration:- Have you have a modification/deferment before?- Does the business have a satisfactory repayment history prior to the current situation?- What collateral is there for the loan?- Do current cash flows demonstrate the business' ability to make the deferment/modification payment?- What steps has the business taken to rectify their current cash flow crunch (aside from asking for a deferment)?SBA Offer In Compromise (Settlement)For those who have decided that it's time to cut their losses and close up shop for good, the SBA does allow guarantors to make a settlement offer if a deficiency exists following the liquidation of loan collateral. This option is only available to businesses that have ceased operations. When considering an Offer In Compromise, keep the following in mind:- The purpose of the OIC is for the lender/SBA to recover all available funds from the guarantors without having to forcibly take the funds via litigation. This means the SBA will not arbitrarily take any amount that is offered. They will only accept offers that they feel are comparable to what they'd get through legal means.- If you plan to stay in business, debt settlement or debt reduction is not an option that the SBA will consider.- Selling business assets to another entity that you own, or to a related party in order to give the appearance of business closure can be considered to be fraudulent.- Starting a new business under a new name, but basically servicing the same customer base in order to give the appearance of business closure can be considered fraudulent.- The SBA will consider both lump sum settlements, as well as payments over time. Lump sums are generally preferred.