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Archive, Refinance, What's Closing Now

$1,846,000 – Conventional Refi – Dental Office

Brandon, FL

This 20-year practicing dentist thought that he finally found his dream office! The bank was all too happy to bury him in a 5-year senior mortgage, with a 5% per year prepayment penalty — and they promised to fund the necessary renovations to convert the office from a chiropractic office to a dental practice. Then one day, they said, “Whoops, we can’t do that.”

After a year of agonizing over his lost dream, he called ComCapFL on the advice of another dentist and good friend.

The bank made it tricky, but after great effort, petitioning the SBA and mountains of paperwork — we were able to CLOSE on a Refinance Loan with enough money for the building renovations and its new equipment. Thanks to our team of think-outside-the-box specialists, his dream practice can become a reality!

Archive, Blog, Commercial Loan News, SBA

New SBA Stimulus Promises Small Businesses Months of Free Money and MORE (EXPIRED)

*Amended on February 23, 2021 to reflect SBA’s Procedural Notice posted on February 16, 2021. Details constantly subject to change. For more information, visit the SBA’s website at www.sba.gov.

As things continue to rapidly evolve in commercial financing during COVID-19, one thing is for certain: small businesses need help more than ever. As it becomes more and more unlikely for a business to walk into their corner bank and secure a loan, private lenders and commercial loan brokers have assumed the role and are coming to the rescue – with the help of the SBA.

This week, the SBA announced its emergency enhancement plans to provide new stimulus for 2021 — and they’re coming in HOT and ready to help small business.

So, if you’re looking to acquire a business, start a franchise, purchase a building for your business, expand or even refinance – NOW is a better time than ever. Why?

Free Money.

That’s right. Unlike the SBA’s stimulus package from the last major recession (which also increased guarantee percentage and cancelled guarantee fees), the SBA has added in an extra bonus of paying THREE full months of principal and interest to the lender on the borrower’s behalf – up to $9,000 per month.

While we wait for the guidelines to officially come out, these are the details that we are hearing from the SBA on how this will actually work…*

For New SBA Loan Borrowers (Approved after Feb. 1, 2021)

  1. Three Months of P&I Payments Made For You by the SBA

For all new SBA loans approved after February 1, 2021, the SBA will make three payments of principal and interest on the loan, paid to the lender, on the borrower’s behalf. These payments are good for all amounts up to $9,000 per month. In addition, the borrower does not need to apply for this relief, as it will be automatically applied to for them, by the lender.

  1. Waiving of Guarantee Fees

In addition to the three free payments, the SBA will also waive SBA Guarantee Fees on all new SBA 7(a), 504, and Micro-loans that are approved starting February 1, 2021. These SBA guarantee fees are paid by the borrower, and are usually around 2-3% of the guaranteed portion of the loan. For example, here are some common amount guarantee fees:

  • $1mm loan = $26k fee waived
  • $3mm loan= $82k waived
  • $5mm loan = $138k fee waived
  1. Increase of Guarantee Percentages for SBA 7(a) Loans

The SBA is also changing the guarantee percentage of its 7(a) loans. These guarantees provide insurance to the lender in case the borrower is unable to repay the loan. In such a case, the SBA would cover the loan payment amount to the lender, thus mitigating the lender’s risk in taking the loan.

While this has no real effect on the borrower, it has major implications for the lenders: it encourages them to fund loans that they wouldn’t have otherwise funded. (Thus, if you were on the cusp, now would be a good time to go back to your lender and try again!) Typically, this guarantee percentage is 75-85%, but thanks to the new guidelines, that guarantee percentage will go up to 90% (or even 100% on loans with commercial real estate!)

With all of these new bonuses, a new $5 million SBA loan will save approximately $135,000 in payments and fees! However, there is a deadline: to qualify, your loan must be approved before September 30, 2021. So borrowers — make sure to apply prior to August 2021, as we will surely see the system bottleneck as it comes to a close…

Who is encouraged to apply?

If you’re looking to purchase, grow or expand your business and require between $500,000 to $5 million, an SBA loan might be for you. SBA Loans cover these requirements:

  • Owner-occupied Commercial Real Estate Purchase or Refinance
  • Debt Refinance
  • Business Acquisitions
  • Partner Buyout
  • Expansion
  • Start-up Franchise
  • Machinery/equipment Purchase

This applies across most industries, even covering hospitality that has bounced back during the pandemic. Unfortunately, this leaves out specific businesses and property types such as gas stations, mobile home parks, and ground-up construction.

Pre-Approval Checklist: What You’ll Need

The SBA loan application and approval process has never been described as “quick and easy” (most SBA loans take about 30-90 days to close), but you can make the process easier for both you and the lender by having these documents prepared ahead of time:

Business Documents

  • Three Years business tax returns
  • Interim Financials (P&L statement and balance sheet – no more than 60 days old)
  • Month-by-Month Financials (may be required for businesses impacted by the pandemic)
  • Business Debt Schedule

Personal Documents (for any owner with a 20%+ stake in the company)

  • Three Years of Personal Tax Returns
  • Updated Credit Score (make sure to double check this!)
  • Personal Financial Statement
  • Resumé (for acquisitions and startups)

And as always, when looking to obtain commercial financing, we advise that all borrowers and business owners keep their big-ticket purchases to a minimum! While a new house or fancy car might be selling at a price that you feel you can’t miss out on, you’ll really kick yourself if it ends up making you miss out on these killer loans!

Where to Apply for a New SBA Loan

Although traditionally, a business’s first instinct is to ask their local bank for a loan, that is no longer a viable option — especially for SBA loans. In order to obtain an SBA loan, you’ll want to apply for a loan with an SBA Preferred Lending Partner, or PLP. However, not all PLP’s fund the same SBA loans, and some only fund specific industries or commercial real estate property types. Your best move, to save time and find the best lender for your loan requirements, is to consult with a Commercial Loan Specialist who can help you examine several different lenders at once. These commercial loan specialists leverage their relationships with PLP’s and behave like a partner to you, the borrower — advocating for you from application to approval to close.

If you’re interested in applying for a new SBA loan today, we encourage you to reach out to our specialists at Commercial Capital Ltd., FL (ComCapFL) and find out how we can help you find the best options for you and your business.

 

 

 

Additional Resources:

Archive, Commercial Real Estate, Refinance, What's Closing Now

$1,288,500 Conventional Cash-out Refi, “No Doc”

St. Lucie County, FL

This investor was post-divorce and needed a liquidity solution, fast… but the cards were stacked against him. Even though he had a full portfolio of SFR’s, the bank still couldn’t consider this loan. The income property was worth far more than the cash flow supported, which made the deal difficult. However, ComCapFL is used to finding solutions for situations like this, where the banks can’t.

With decent personal credit, our No-Documentation program provided the solution he needed to refinance AND get cash out with a 30-year, fixed rate loan. One “blanket” loan on multiple rental units = problem solved! Not only did the investor get his liquidity, but now his portfolio is more manageable than before the deal. That’s just another good solution!

Archive, Bridge Loan, Fast Business Loan, What's Closing Now

$3,968,750 – Term/Bridge Loan – Gov. Contractor

Melbourne, FL

A fast closing was essential for a 40 year-old, stabilized government contractor. They called their own bank for a CRE cash-out refinance loan on their office property — a pristine piece of CRE collateral with less than $100K left on the original mortgage balance. After 3 months of “lip service” and wasted time, the bank came back with a “NO.” With 100 employees facing layoffs and over $200MM in new contracts approved and pending, we were able to provide a $500K term loan in less than 1 week… just in time for payroll, saving 100 jobs and a great business. We followed this loan with another $3,470,000 bridge loan from our in-house funds. We closed in under 3 weeks, with no appraisal, just in time to fund the operation’s cash requirements.

*On a personal note, all of us at Commercial Capital Ltd. really like it when we can help save jobs, protect the families and keep perfectly solid businesses from facing extinction – especially when the bank can’t!

Archive, What's Closing Now

$700,000 Line of Credit – Physician’s Practice

Vero Beach, FL

At the time that this doctor’s mortgage was about to term, the value of his collateral and real estate had significantly depreciated. Because of this, the bank denied his loan request, leaving him without collateral and without many options — until he came to ComCapFL.

Using his stock portfolio, we were able to set him up with a line of credit, secured not by his business collateral or real estate, but by his securities. (Note: the doctor did not have to SELL his stocks!) This loan, which functions similar to a Bridge Loan, allowed the doctor to free up enough cash to pay down the depreciated loan value AND refinance his property at the lower valuation with prime rates.

Surprise ending: after the line of credit and refinance, the doctor had his property reappraised — and actually got his money back!

Have an loan issue that seems impossible to solve? Call our experts today and see what kind of solutions are available to you (that the banks deny exist!)

Archive, SBA, What's Closing Now

$1,144,500 SBA Restructure, Refi CRE – Manufacturing Co

Refinance – Industrial

A 25-year-old family business ran into a wall with the bank. The bank called their note post-recession just as their real estate collateral value dropped. The pressure was on and business was slow.

What the business did not know is that the SBA is also tasked with saving good, solid businesses that hit a rough patch as a result of the economy. They do this all in the interest of protecting and preserving jobs and protecting our small business economy – which is the lifeblood of America.

We solved their problems by consolidating their debt, restructuring and refinancing their commercial real estate and equipment. We also secured financing to provide working capital to catch up on their past-due vendor accounts in order to continue expanding production. Because of these SBA loans, the company was able to stabilize, resume production and carry on their legacy.

Archive, Commercial Real Estate, Refinance, What's Closing Now

$895,300 – Blanket Refinance on 8 SFR’s

Stuart, FL

Blanket refinance loans are powerful and convenient because it can cover multiple single family residences (aka SFRs) in one loan. This investor had individual mortgages on 8 different SFRs and all of them were coming to term. To add fuel to the fire, not all of the properties were cash-flow positive — creating a big challenge in the investor’s ability to secure financing.

With our Alt-A (just miss) programs, we were able to close a blanket refinance loan based on only the property appraisals. The rate was then adjusted accordingly to account for the lender’s risk. This was a no-document loan — all that was required was appraised value of properties, good credit, and personal financial statement, not cash-flow. This proved to be another ComCapFL success in finding a solution for an unusual loan!

(And we financed this one twice!)

Archive, Commercial Real Estate, Refinance, What's Closing Now

$1,250,000 CRE Refinance – Gas Station/C-Store

West Palm Beach, FL

Financing a gas station is tricky: it’s part business, part commercial property. Typically, banks don’t like working with gas stations because of the business risks, hazards and the potential for land contamination. This particular gas station and convenience store was having a difficult time with the bank as its loans were coming due.

However, since this was a nice property, we were able to use the value of the land and buildings to secure a fixed-rate, prime conventional refinance. The gas station owner was very happy that he was able to bypass the bank and still get a cheaper, low-rate, long-term amortizing loan.

Archive, Commercial Real Estate, Refinance, What's Closing Now

$984,000 – CRE Cash-Out Blanket Refi – Multiple MF

Riviera Beach, FL

What happens when you try to do a cash-out refinance of a five-unit apartment, three quads and four duplexes? Usually, the bank scratches their head and says “no”.

We did a blanket, cash-out refinance loan on all these properties, consolidating them into one convenient payment. No documents, no proof of cash flow — only the property appraisals were needed to solidify this loan. Another commercial real estate investor problem solved by ComCapFL!

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