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SBA Lender’s Advantage Loan Guaranty Program

SBA Lender’s Advantage Loan Guaranty Program. Oklahoma District Office June 2008. Topics to Be Covered. Characteristics/Benefits of the Lender’s Advantage Loan Program Overview of Application Requirements and Associated Forms Other News Contact Information. Lender’s Advantage.

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SBA Lender’s Advantage Loan Guaranty Program

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  1. SBA Lender’s AdvantageLoan Guaranty Program Oklahoma District Office June 2008

  2. Topics to Be Covered • Characteristics/Benefits of the Lender’s Advantage Loan Program • Overview of Application Requirements and Associated Forms • Other News • Contact Information

  3. Lender’s Advantage 7a Loans up to $350,000 Simplified Application 3-5 Day Loan Processing

  4. Lender’s Advantage • Specifications: • Fillable PDF application can be transmitted by fax or email • Simplified SBA loan eligibility checklist for lenders use • Specialized eligibility assistance through SBA’s Standard 7a LGPC Help Desk • Training from Oklahoma District Office on SBA loan requirements and processes

  5. Lender’s Advantage • SBA’s 85/75 percent guaranty mitigates your risk, allowing you to offer credit to newer, less secure businesses • The guaranteed portion of an SBA loan can be sold to an investor to maintain your liquidity and enhance your yield • Guaranty fee can be taken as a direct tax credit by lender or borrower on Oklahoma state tax return

  6. Application Forms REQUIRED • 2301A, Small Business Application for SBA Guaranteed Loan • 2301B, Lender’s Application for Guaranty • 2301C, Eligibility Questionnaire • Lenders Credit Memorandum • Supporting Documentation as indicated in Forms 2301 A, B, and C REQUIRED IN CERTAIN CASES • 159, Fee Disclosure Form (for packaging by Agent) • 912, Statement of Personal History (regarding past legal charges) • 4506T, Request for Transcript of Tax Return (existing businesses corporate returns) to IRS • G-845, Document Verification Request (for non-citizens) to CIS

  7. Tier 1 Loan Lender’s Credit Memo should address the following at a minimum: • History and nature of the business • Cash flow relative to debt service • Management experience of principal(s), particularly in the industry, financial condition of business, nature of competition • Balance sheet including requested loan funds and equity injection • Collateral adequacy (using SBA liquidation values) • Explanation/Justification for refinancing any debt as part of loan request • Discussion of credit analysis, including lenders rationale for recommending approval • Any other relevant information • Up to $150,000 • Existing Businesses only • No Change of Ownership or Judgments/Bankruptcy filings

  8. Tier 2 Loan • Lender’s Credit Memo should address the following at a minimum: • 8 items under Tier 1 plus: • Analysis of working capital adequacy in next 12 months • Analysis of cash flow to include historical/projected cash flow covering debt service after SBA loan • Discussion of any that apply: a) seller financing b) stand by agreements c) 90+ day delinquency d) trade disputes • For change of ownership, include business valuation • Discussion of bankruptcy filings and judgments • Any loan amount up to $350,000 including: • New Businesses (2 years or less) • including Change of Ownership • Businesses that have had judgments/bankruptcy filings • $150,001 to $350,000 • Existing Businesses • No Change of Ownership, Judgments/Bankruptcy filings OR

  9. Assistance with Eligibility Loans with complicating eligibility factors such as affiliates, refinance, citizenship, excess personal resources should consult SBA at 916-735-1515 x4368 or 7aquestions@sba.govafter completing Form 2301 Part 3.

  10. Other News • The New Effective Date for SOP 5010(5) is June 15 (changed from May 1, 2008) • Simplified Application Process for Credit Unions • Local Training on Servicing and Purchase Processes Scheduled for July • Mid America Lender’s Conference set for August 11-13 in San Antonio, Texas

  11. Contact Information Standard SBA Form Page: www.sba.gov/banking OKDO website: http://www.sba.gov/localresources/district/ok/index.html SOP 50-10(5): www.sba.gov/aboutsba/sbaprograms/elending Eligibility Assistance: SBA Sacramento Loan Processing Center 7aquestions@sba.gov or 916-735-1515 x4368 Loan Requirements and Processes: Oklahoma District Office cindi.anderson@sba.gov or 405-609-8018 sandra.ransome@sba.gov or 405-609-8019 Mid America Lenders Conference: www.malc-conference.com

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