[greg]

If SBA loan declines a merchant, is there a term loan with less requirements ?

construction business

credit scores = 670 - 680

monthly avg. = $145k

looking to consolidate all or partially debt to lower monthly debt = $ 14k monthly

seller financing private loan = $ 150k
mca position = $ 15k

total debt = $ 165k

[Incbiz440]

You need to ask the lender to go into the portal and get SPECIFICS for the decline. Debt service? Too much debt? Cash flow? Net profit? Lack of projections? Find out and reach out. I've had SBA loans declined and adding projections allowed it to get an approval.

Agreed, not enough info here to provide useful feedback. May just be that particular lender's criteria or may be something critical.

[greg]

Thanks Steve for responding.

I'd went through Smartbiz loan portal.

This is their response in their portal;

Declined
Insufficient cashflow and ability to repay all business and/or personal debts.



Is there any wiggle room here for you and I to hop on the phone and discuss further ?

[greg]

I'm sure merchant has some assets, I will findout directly from merchant.

Also I'd just remembered that he missed two payments (Jan and Feb) on that seller financing private loan.

Is that considered a loan default ?

[greg]

Thanks Steve for your response.


All right, I'm going to fine comb his bank statements and get a list of his assets and respective values. And get back to you ...

I'll check for nfs, ending balances , along those lines. this way , you can determine the possibilities with more info...

[greg]

Hi Steve,

The merchant had just asked me .

Assets ? Are you referring to business and personal or just business ?

[sigmundpannu]

Understand that while SmartBiz has a great packaging service (just bought a bank so it will change) their box is small. They run a quick DSCR calculation along with a liquidity analysis (bank statement analysis similar to MCA). If the borrower doesn’t pass it won’t make it to a lender in their network. They do no projection based underwriting. SBA didn’t decline, SmartBiz did. If you have projections Newtek may be an option- I can’t remember if they shy away from construction though.

[greg]

Thanks for your insightful comment. Yes, I'd meant to state Smartbiz declined application, not SBA , you're correct, Smartbiz review files before sending them to lenders to close. You'd gave me the confidence to continue with this SBA attempt on this merchant. "Projection based underwriting" is that new phrase I'll never forget. Thanks again