[CHAMP3]

If anybody has clients in need of a true SBA 6.25% @10 yrs or used equipment purchases then contact me as we are facilitating 30 apps per month and closing 85%. Will pay broker payouts

Chris Wilcox
916.400.9001 Ext.103
888.535.8499 (Fax)
cwilcox@premierbusinesslending.com
www.premierbusinesslending.com

[RichardGerard]

Mr. Wilcox,

As someone that does an average of 3 SBA Express Loans per month (and other 7a, and 8a loans) through separate aggregators I can tell you unequivocally there is no possible way to get a 7 day SBA closing.

After the data is uploaded (which often takes 3-5 business days) and analyzed for individual and business credit, a relationship manager is assigned and then the Underwriting begins. After the cash flow analysis is done, it is then necessary to get the landlord (where applicable) to sign off on the Landlord Subordination document, which allows the Government to access the clients rental space in the event of a default. While this sounds harmless- many landlords do not wish to grant access to their space. This process often takes several business days as well.

Assuming the Landlord and the SBA agree (and all other Underwriting conditions have been met), the file is then sent to audit (typically another 3-5 days- or more depending on case load). If the deal passes audit, pay off letters (where applicable) are gathered (and acknowledged), and a clear to close is given. At which point the deal is transferred to a closing agent, who will meet the client and fund proceeds. Finding a closer with a schedule that coincides with the business owner is not always easy to arrange as well.

If all of the above occurs seamlessly, a deal can close in approximately 18-22 business days. What if the Underwriter needs clarification of an item on the balance sheet- that perhaps should not be there? What if internal audit is backlogged? What if the client isn't great at gathering their documents? If anything occurs- including a business Holiday- times can often be 30 business days.

As for Broker payouts: the SBA has very stringent guidelines what can legally be charged to a client in addition to the commission an aggregator gives- which also takes into account the 2.6% the SBA charges for its guarantee. What points are you giving your ISO's? As you are doing 30 apps per month- with an 85% closing ratio- I'm assuming you're giving at least 2 points to the Originator since you're working on volume. Correct? So then you are billing the file as a consultant up to the $2500 maximum.. Right?

If you've found a way to change the process to 7 days, I'm certain the folks at Funding Circle, Fundation et al would be quite concerned.. For that matter, why would many businesses need ACH debit/Advance Capital?

[CO1]

Richard - This was a great post!

A gentlemen and a scholar!

[CHAMP3]

Mr. Gerard,

Thank you for the education on SBA however I simply stated that we are getting approvals within 7 days. The payout to vendors or client typically takes another 10-14 days.

2 points is correct however you can charge an additional $2500 in addition. As you know, qualifying for a SBA is much more stringent than a Funding Circle, Fundation ect. however this is why those banks charge a much higher premium.

We have had much success in our Franchise and Franchisee on-boarding of customers through our SBA Channel. We have had above average success with start up Franchisees as well and as you know those are challenging in there own right.

So closing within 20 days is standard in our process and at the end of the day it all boils down to relationships and how those relationships are managed. Again, one of our strong suits.

[RichardGerard]

Champ3,

I'm sure you will agree: It isn't challenging to have a Hedge Fund, Asset Based Lender, or a Commercial Bank submit a term sheet within 24 hours of reviewing the basics of the deal- HOWEVER when the deal Funds is the bottom line. So 20 business days is approximately 1 month for an SBA Express Loan- we agree, in principal- if everything falls right.

As for the SBA being more stringent for approvals: In MANY instances the SBA is easier to get done because of the diminished DSCR based on the 10 year amortization versus backing in #'s with higher rates and shorter terms. I believe clients are fearful of the SBA process and the time in which it will take the loan to close, and the Intermediaries steer the file away from that route because of lack of familiarity and/or the modest commission structure.

The Professionals on this Blog are familiar with those Lenders that have an appetite to work with Franchises (start up or otherwise), and all have relationships that they manage.