February 4, 2021

Three Reasons Cash Flow is Improved with SBA 7(a) Loan

Posted in blog-post, business-financing, sba-7a-finance, by Gerard Dehner

Here are three great reasons to consider refinancing your current loan or using the SBA 7(a) for your next acquisition. 

Cornovus Capital can connect you with the SBA lender most interested in your kind of work. Not every SBA lender will say “yes” to every kind of loan, which is why you want to talk with the experts at Cornovus Capital. 

Reason #1

Borrowers who take out new 7(a) loans prior to October, 2021 will receive the first 6 months of principal and interest payments. Payments will be capped at $9,000/month for a maximum total of $54,000. We consider that “free money.”

Reason #2

SBA is waiving the guarantee fees for borrower and lender! The guaranty fee covers the costs of the 7(a) program so that business bears the burden instead of the U.S. taxpayer. The amount varies depending on the size of the loan. For example, a guarantee fee for an average $3M loan might be >80K. The fee for an average $4.5-$5M loan would be  >$150,00. While fees are waived, you will pay nothing!
This fee is due within 90 days after the loan closes and is frequently paid out of loan proceeds.

Reason #3

In the event the pandemic continues, businesses with SBA 7(a) loans will be protected in different ways than conventional loans. Last year, the SBA 7(a) program paid principal and interest for select businesses with loans made in a certain time frame. Check out this example: A Cornovus Capital customer with a 75-room hotel had over $66,000 in payments made. This same hotel will get $27,000 – $72,000 of principal and interest payment in 2021 depending on whether they quality for 3 months or 8 months of relief.

Cornovus Capital emphasizes that this is not a deferral. The borrower isn’t kicking the can down the road. The SBA is actually paying the note on your behalf. Conventional banks may defer your loan but they won’t offer this kind of support.

Cornovus Capital can guide you.

Cornovus Capital has worked with the SBA and SBA-lenders across the country for more than 20 years.

While each lender follows SBA guidelines, they have the latitude to set their own internal lending requirements. Borrowers learn the hard way that one SBA lender might say “no” when another says “yes.” Cornovus Capital has a nationwide platform and can guide your business to the best options.

Please contact Cornovus Capital today to talk to an expert about the options that are best for your business.

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Tags: sba-lending, owner-occupied-business-finance, sba-7a-financing, sba-7a, owner-occupied-financing, sba-financing, owner-user-financing, small-business-financing-up-to-5-million,