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SBA Programs at a
Glance
What is a Small Business?
Generally speaking a business is considered small if it is in:
- Retailing or Services and annual sales are no more than $6 - $25 million
- Wholesale and employees do not exceed 100
- Construction and annual sales are no more than $12 - $27.5 million
- Manufacturing when employees have not exceeded 500 1,500
- Same exceptions do apply
Use of Loan Proceeds
Loan proceeds can be used for:
- The purchase or construction of business real estate
- Working Capital
- Equipment
- Lease hold improvements
- Debt consolidation when such refinancing is to the benefit of the small
business
Loan Terms
The term of a loan is based on the use of the loan proceeds:
- Construction of Purchase of Real Estate up to 25 years
- Equipment for the usable life of the equipment up to 10 years
- Working Capital up to 7 years
Collateral Requirements
- A loan application will not be declined solely due to the lack of
collateral, however, a borrower is expected to pledge all available
collateral to fully secure the loan.
- All persons owning 20% or more of the business must personally guaranty
the loan.
- When needed, non-business assets can be taken to fully secure the
business loan.
Loan Repayment Requirements
All loans must meet the following requirements:
- Repayment must be supported by the cash flow from the business being
financed.
- Loan must be fully amortized (principal & interest) over the stated
maturity. No balloon payments.
- The owners must have a reasonable amount of investment in the
enterprise. Such amount will vary depending on the risk that is
associated with the type of loan, the collateral being offered and
expected cash flow of the business. It is not unusual for the equity
requirement to be from 20% on strong credits to 35% on riskier requests.
Interest Rates
All loans are tied to New York prime rate and rates are very
competitive. The interest rate is set after reviewing an application and
assessing the risk.
Loan Application Process
- Names, addresses, e-mail addresses, telephone numbers and social
security numbers of all owners of the business, name of the business and
business address.
- The amount of loan requested and the purposes for the loan. Information
about the owner, their management capabilities and experience in
operating the type of business that they have or want to start.
Information based on the last 3 years of financial statements or last 3
years of Federal tax returns.
- If at any time assistance is needed, there is an option of contacting a
staff member either by phone or through the Web system.
- After receipt of the application, it is assigned to a loan underwriter
who contacts the business owner and provides them with a phone number to
call for questions. After the loan has been approved, the owner is
introduced by the underwriter to a staff member who will schedule the
loan closing. Legal representation is needed at closing.
Other Info
- There is an application fee to cover initial expenses. If a loan is
declined, this fee will be returned to the applicant. If a loan is
approved, a credit is issued for the payment at closing; however, if the
owner decides not to take the loan, the fee will be kept to cover costs
incurred.
- The owner is given an estimate of closing costs which vary due to
geographic area, type of collateral being pledged, the number of
collateral items needing title searches, etc.
- Upon approval, the owner is given a loan authorization that lists all of
the requirements that must be met at loan closing. Staff is available to
explain each item and answer any questions.
- All appraisal costs will be reimbursed by the owner at time of
closing.
Application Fee: $2,500 non-refundable inspection/loan processing
fee payable to American Trust Corporation with the loan application,
will be credited to origination fee at closing
Origination Fee: 1%
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