A person who wants to borrow from a lender who finances SBA Loans needs to have these qualifications:
1. EXPERIENCE – Requisite experience in the industry he is in or wants to participate in. Standard guidelines for this experience is a minimum of one year as an owner or manager.
On a case-by-case basis, a Borrower can transfer
experience in a different industry as qualification
for this guideline.
2. CASH – Requisite funds as a down payment and/or “cash injection” for the purchase or project including up-front costs charged by the SBA Lender.
a) These funds can come from the Borrower’s bank accounts.
b) These funds can be “gifted” to the Borrower from any source.
c) These funds need to be “sourced”. This means the funds need to be shown in a bank account for three
months before the loan closes. This can be a combination of the Borrower’s bank account and if funds are “gifted”, then from the “giftor’s” bank account as well.
3. CREDIT – Requisite credit to qualify under the SBA Lender’s guidelines. There are national SBA Lenders who do not have a minimum credit score requirement. However, a Borrower will have difficulty or not be able to qualify if there are these issues on a credit report: late payments, charge offs, judgments, tax liens and the like. A suitable Letter of Explanation will be needed for any issues which show up on a credit report.
4. INCOME – Requisite of personal income into the Borrower’s household. The industry standard for a borrower’s income into the household is $30,000 dollars. An SBA Lender wants to make sure the borrower has enough household income to cover the borrower’s household expenses including food. (exceptions on a case-by-case basis with a letter of explanation)
a) The income from the spouse of the Borrower can be used to qualify the household income.
Joel Soforenko is an industry veteran having extensive experience with SBA 7(a), SBA 504 and USDA loans. He has assisted borrowers as a loan originator, processor, underwriter and Manager of the SBA Department of a major origination platform.
For more information contact:
Continental Finance Capital Corporation
(617) 336-3215 x 5