Applications Process & Forms


Application Process

Pre-qualification Business Lending Partners (BLP) provides up-front eligibility screening services to determine if a small business meets the general criteria to qualify for an SBA loan. Contact BLP today to discuss your project.
 
BLP Application A BLP representative will work with the small business and the participating lender to collect all required documentation (see 'Application Documentation Requirements' below).
 
BLP Approval BLP will structure the loan within SBA's guidelines and perform analysis on the creditworthiness of the company.

Loan Approval recommendations will be made by BLP's Loan Committee and Executive Committee, both of which meet every Monday and Tuesday respectively.
 

SBA Approval The loan application will then be submitted electronically by BLP to SBA once all remaining documentation is collected, signed, and dated by the loan applicant. This process typically occurs the same day Executive Committee approval is received.
 
SBA Authorization SBA will issue its Loan Authorization upon approval which outlines the terms and conditions of the SBA financing.
 

SBA 504

February 2018

20-Year Fixed Rate:

4.940%

10-Year Fixed Rate:

4.657%

 

 

Application Requirements

Contact a BLP representative before submitting a full application to prequalify for the programs based upon applicant's eligibility. Below is a list of the application requirements.  

All documentation must be dated and signed prior to submission.

  1. Business Loan Application:
    Original signature and date must be provided on all documents provided by the applicant.
  2. Business plan:
    This should include business products and services, history of the business, a description of management and a market analysis, including key customers, the size of the market, competitors and the competitive advantage of the business.
  3. Resumes:
    A Resume on the attached form is required on all owners, officers and key management of the business
  4. Personal Financial Statement:
    All owners which own 20% or more of the business must complete the personal financial statement on SBA form.  if married, this must be a joint statement and include the spouse's signature.  Owners must also attach a copy of their driver's license to this statement.
  5. Cost Documentation:
    Once the business has identified all its funding needs, those costs need to be documented as much as possible as part of the application.  This documentation may include things like:
    • ​Quotes on equipment
    • Accepted offer to purchase on land or buildings
    • Construction contract or budget from contractor
  6. Year-End Business Financial Statements:
    Financial statements for the last three fiscal year-ends of the business are needed, including balance sheets and income statements.
  7. Recent Business Financial Statements:
    Interim financial statements (year-to-date) for a period ending within 90 days of application is needed, including aging reports of accounts receivable and account payable.
  8. Schedule of Debts:
    Borrower must complete the attached schedule of existing debts including date and amount of original loan, the rate and term, the current balance and how it is secured.
  9. Business Financial Projections:
    The Business may be required to provide two years of financial projections, including balance sheets, income statements and written assumptions.  Monthly cash flow projections may also be required, particularly for new businesses.
  10. Tax Returns:
    Corporate and personal federal tax returns are needed for the past two years.  For married individuals, joint tax returns must include the spouses signature.
  11. Franchise Documents:
    Signed copies of the franchise documents, or dealer, supply or license agreements are needed for the business.
  12. Affiliated Businesses:
    Information on any other businesses owned or partially owned by the applicants must be provided, including names of those businesses, ownership breakdown and the last two year-end financial statements or Federal Tax Returns.
  13. Other Funding Commitments:
    Commitment letters for all other funding sources as part of this financing package needs to be provided, including the bank commitment letter describing the terms and conditions of its financing and the reason for using the SBA 504 program.

Other Requirements:

Loan approval would be contingent upon receipt of the following:

  1. Appraisal:
    Funding projects that involve land or building purchases or new construction will require an appraisal.  This is typically ordered by the financial institution participating in the financing.
  2. Environmental Study:
    Funding Projects that involve real estate will require some type of environmental study as determined by the financial institution and SBA requirements.  This may start with a questionnaire to be completed by the owner of the property followed by a professional report ordered by the financial institution or SBA.

 


Other Forms

Additional application requirements prior to final application submission to SBA:

  1. IRS 4506-T Form
  2. Statement of Personal History
  3. Statement of Laws and Executive Orders
  Borrower Benefits
  • Lower Down Payments Required
    The borrower may provide a cash down payment as low as 10% of the total funding needs, allowing them to save their cash for other business needs.

     
  • Fixed Rates on SBA 504 Loan
    The borrowers do not have the risk of an increase in the interest rate on the SBA loan making long-term planning for the business easier because borrowers know the amount of their mortgage payments for the next 20 years.
     
  • Long Term
    SBA 504 loans are made for 10 or 20 year terms. Longer terms results in lower monthly payments for the borrower without the concern of balloon payments due prior to the loan maturity.

     
  • Low Interest Rates
    The long-term, competitive interest rate results in savings over the life of the loan.

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 Eligible Use of Funds

  • Land Purchases
  • Site Improvements
  • Existing building purchases, expansions or renovations
  • New construction
  • Equipment purchase and installation
  • Projected related costs such as furniture and fixtures, title insurance fees, legal fees, appraisals, environmental reports, architects fees, survey costs, points on bridge loans, etc.
  • Refinancing – Limited debt refinancing is permitted but must involve a business expansion where the refinance may not exceed 50% of the project costs (other restrictions apply).
 
Ineligible Use of Funds
  • Working Capital
  • Inventory
  • Vehicles licensed to be on the roads (trucks, cars)
  • Stock purchases

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Eligible Businesses
  • Must be a for-profit business
     
  • Size Standard:
    The business must be small as defined by SBA as those businesses with a net worth below $15 million and an average net profit (after taxes) for the last two years of below $5 million.  If these standards are exceeded, the business can still qualify for the program by meeting other SBA size standards based on either number of employees or annual revenue, depending upon the industry.
     
  • Citizenship Requirement: 
    The business owner(s) must be U.S. Citizen(s) or resident alien(s) with permanent resident status.

     
  • Occupancy Requirement: 
    For funding projects that include real estate, the business must intend to occupy at least 51% of the 'Rentable Property' for existing structures or at least 60% of the 'Rentable Property' initially (and 80% over time) for new construction projects.  "Rentable Property" is the total square footage of all buildings or facilities used for business operations, which may include exterior space (except parking areas) that is actively used in Borrower's business operations.
     
  • Job Requirements and Waivers:
    The small business must meet the job creation/retention requirement or qualify for a waiver. The general requirement is one job per $65,000 in SBA funding for typical 504 loans, or one job per $100,000 for small manufacturers.  If a business does not meet the job creation/retention goals of the SBA, they may qualify for the program under one of the other goals of the program found here.
 
Ineligible Businesses
  • Non-profit businesses
  • Lending institutions
  • Insurance institutions
  • Gambling organizations
  • Businesses of a prurient nature
  • Businesses of restricted nature that exclude based on race, sex, or creed
  • Speculative businesses/development
  • Businesses located in a foreign country

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 SBA Loan Fees and Pre-Payment Information

  • Approximately 3.2% administrative fees are financed in the SBA loan amount.
  • $2,500 for legal fees for the loan closing are financed in loan amount.
  • Participating bank is charged a 0.5% senior lien holder fee.
  • Out-of-pocket costs are charged directly to the customer, i.e. title insurance for closing, lien searches, recording the mortgage, etc.

The majority of the fees are collected at the time of loan funding and financed in the SBA 504 loan amount.  A $2,500 fee is collected at the time of loan approval and applied towards closing costs.  Ongoing servicing fees are reflected in the 'blended interest rates'.

Discounts offered to Veterans!  BLP offers the following discounts on SBA 504 loans to businesses at least 51% owned by military veterans:

Loans less than $1.5MM:  0.5% of processing fee is waived (up to $7,500 savings)

Loans more than $1.5MM:  0.25% of processing fee is waived (up to $12,500 savings)

 

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SBA 504 Pre-Payment Information

During the first half of the SBA 504 loan term, a prepayment penalty exists.  Therefore, it is recommended that if the business wants to pay down some of its long term debt, that they prepay the bank portion of the financing package. The SBA loan cannot be partially prepaid.  The prepayment penalty declines every six months based upon the remaining principal balance of the loan and disappears altogether a 20-year loan reaches 10 years and a 10-year SBA loan reaches five years.

Guidelines regarding prepaying SBA 504 loans are as follows:

  • Company needs to notify BLP, in writing, at minimum 45 days prior to the date they would like to prepay their SBA 504 loan.
     
  • An SBA loan can be prepaid any month, however, it is recommended that if the borrower wishes to prepay their loan it is done on a six month interval to save on interest payments.
     
  • Prepayment penalties may apply. Prepayment penalty levels decline at six (6) month intervals and are eliminated once half of the term has passed.
     
  • The prepayment penalty is an amount equal to the outstanding principal balance plus accrued interest and the prepayment penalty.
     
  • Generally, the prepayment penalty equals 100% of the interest lost in the first year of the loan, 90% of lost interest in the second year, 80% the third year, etc.  After the tenth year, this becomes 0%.
     
  • Upon the funding of an SBA loan, the customer is provided a prepayment schedule which provides the dollar amount of the penalty for prepayments every sixth month until the penalty no longer applies.

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