Community Connection
Keeping SBA Program
small
QUICKREFERENCE
business
SBA (7a) LOAN SBA EXPRESS LOAN SBA 504 LOAN
Loan Size •Up to $2,000,000 •Up to $350,000 • $125,000 to $10,000,000+
strong
Loan •80% - 90% Bank Loan •80% - 100% Bank Loan •50% Bank Loan
Structure •10% - 20% Down Payment •0% - 20% Down Payment •30% - 40% CDC Loan
•10% - 20% Down Payment
By Rhonda Saunders
SBA •Loans with maturities greater than •50% All Loan Amounts •0% Bank Loan
SVP RETAIL ADMINISTRATION
Guarantee* 12 months; up to 90% guarantee •100% CDC Loan
Small business is what America was found-
•Loans with maturities less than
ed upon, both as an economy and a country.
12 months; up to 75% guarantee
The initiative, pride and courage small busi-
ness owners possess represent the best of
Interest •Fixed, Variable, or Combination •Fix or Variable •Fixed or Variable on Bank
what our country stands for.
Rates •Fully Amortized – No Balloon •Index: WSJ Prime, SBA Libor, Loan
•Index: WSJ Prime, SBA Libor, or or Optional Peg Rate •Fixed on the CDC Loan
With the new Small Business Administra-
Optional Peg Rate •Maximum rate: Index + 4.50% •Rate negotiated on Bank Loan
tion (SBA) lending guidelines, Fifth Third Bank
•Maximum rate: Index + 2.25% if for loan amount of $50,000 •Rates on CDC portion are set
stands ready with an enthusiastic dedication
maturity is < 7 years or more monthly at the time of funding
to small business. Ready with the under-
•Maximum rate: Index + 2.75% if •Maximum rate: Index + 6.50%
standing of how to make the new SBA loan
maturity is 7 years or more for loan amounts < $50,000
guidelines work for you. Ready to help keep
•For loans:
your small business strong.
–$25,001-$50,000 + 1.00%
–$25,000 or less + 2.00%
What is an SBA Loan?
The SBA is an independent agency of the
federal government. The SBA assists small Loan Term •Real Estate – up to 25 years •Term Loan – same as 7(a) CDC Loan:
business in many ways, including setting •R/E Improvements – up to 25 years •Line of Credit – up to 7 years •Real Estate - 20 years
guidelines for SBA loans and backing them •Equipment – up to15 years •Equipment – 10 years
with a guaranty. You never actually apply to •Leaseholds – up to 10 years Bank Loan:
the SBA for a loan. Instead, you apply for a •Working Capital – up to10 years •Real Estate – 10 years
commercial loan through Fifth Third Bank that •Equipment – 7 years
is structured according to SBA requirements.
This means SBA loans are made by Fifth Third Loan •Purchase Land & Building •Same as 7(a) •Purchase Existing Building
Bank and guaranteed by the SBA. The guar- Proceeds •Construction, Renovations, or •Revolving Lines of Credit •Land Acquisition and Ground
anty helps reduce the bank’s risk and enables Use Leasehold Improvements Up Construction
it to provide financing that otherwise may not •Furnitureand Fixtures •Expansion of Existing Building
be available under the same terms. •Machinery and Equipment •Building Improvements
The SBA recently made two major chang-
•Inventory and Working Capital •Equipment (no rolling stock)
es to their lending guidelines. SBA borrower
•Refinance Existing Debt
fees have been temporarily eliminated and
the SBA is now guarantying up to 90 percent
Loan Fees* •All SBA borrower fees have been •All SBA borrower fees have •Fees are negotiated for the
of loan amounts. Both changes are aimed at
eliminated until further noticefor been eliminated until further 50% Bank Loan
helping more small businesses get the credit
loans with maturities greater than noticefor loans with maturi- •SBA borrower fees for the
they need to keep their businesses going
12 months ties greater than 12 months CDC portion only of the loans
strong.
•Loans with maturity less than 12 •Loans with maturity less than are eliminated.
months must pay .25% fee on 12 months must pay .25% fee
Compared to a conventional loan, the new
guaranteed amount on guaranteed amount
SBA loan offers a handful of advantages:
• SBA borrower fees temporarily elimi-
nated
Job •None •None Manufacturers:
Creation •One newjob mustbe created
• Lower down payments in many cases or retained for each
• Longer terms and amortization periods
$100,000 of the CDC portion
of the loan
• Closing costs can be financed on an
All other Industries:
SBA loan in many cases.
•One new job must be created
or retained for each $50,000
To learn more about SBA loans, and other
of the CDC portion of the loan
Fifth Third Bank Business products, call 866-
531-3428 or stop by any Fifth Third Bank lo-
cation.
*Effective March 16, 2009 until further notice
The Michigan FrontPage • July 10, 2009 7
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