State Business Capital (SBC) - SBA, USDA and Conventional Small Business Loans

Dear Business Professional:

If you're like most businessmen, you have mixed feelings about taking out a business loan. "That extra money would sure come in handy," you say to yourself, "but I don't know if it's worth all the time, trouble and aggravation!"

We at State Business Capital agree completely. That's why we've made the process as fast, easy and convenient for you as possible.

We can handle your business needs for expansion, acquisition or start-up capital or practically any type of business growth funding. Our loans are ideal for franchises, office/warehouse condominiums, freestanding buildings, and small office buildings.

No inconvenient visits to banks or loan companies. No intimidating interviews with over-bearing loan officers. No compensating bank balances required. No saving or checking accounts needed. You can apply for the money you need for your business by mail – in the privacy, comfort and convenience of your own office or home. Since 1981 this is how we've always done business – and it's one good reason why so many businessmen have come to us for their commercial and business real estate-secured loans from all across the country.

There are other good reasons as well, including the government's competitive rates, flexible terms and our outstanding customer service.

We arrange for the advancement of funds to corporations, partnerships and sole proprietorships. With our SBA loan you can borrow from $300,000 up to $2,000,000 secured by real estate and equipment. With our USDA loan you can borrow from $2,000,000 to $10,000,000 (to $25,000,000 in some instances). With our Special Conventional loan you can borrow from $400,000 to $6,000,000 secured by real estate (not including equipment) or going concern value. And with our NEW " Stated Income/Stated Asset" loan you can borrow from $300,000 to $1,000,000. And we'll help you keep your payment low by giving you a choice of repayment plans (up to 25 years SBA and 30 years USDA, fully amortized, 15 to 20 years Conventional, fully amortized – no balloon). You can be sure you'll find terms that fit your needs exactly.

When we receive your loan application with the required documents, pending qualification, we'll get back to you right away with preliminary approval. We'll even arrange the closing in a location convenient to you. Usually, once we receive your application and essential documentation, you'll have your approval in 7 to 15 days! As long as your credit is good, have a valid business purpose for the loan, can meet the monthly payments, have adequate collateral, and meet federal regulations, you will be qualified.

For speed, convenience, privacy and attractive terms, you'll find State Business Capital's arranged business loan made to order.

Best of all, we're just an e-mail away.

STATE BUSINESS CAPITAL (SBC)

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The Business and Industry (B&I) USDA Government Guaranteed Loan Program guarantees loans to businesses to benefit rural area.

The primary purpose of this program is to create and maintain employment and improve the economic and environmental climate in rural communities. This is achieved by expanding the existing private credit structure capability to make and service quality loans to provide lasting community benefits.

Business Services
Manufacturing plants
Processing plants
Distribution
Wholesale
Retail operations
Hotels & Motels
Restaurants
Citrus Picker/Handler
Warehouses
Tourist/recreation facilities
Marina
Gas Pipeline
Family Entertainment Facility
Convenience Store
Juvenile Correction Facility
Ship Builder
Cold Storage Facility
Oil Refinery
Bottled Water Company
Auto Dealerships
Car Wash Facilities
Gas Stations
Lumber Mills
Franchises

New Business Ventures
Truck stops
Sawmill
Mulch manufacturer
Fruit processor
Coal mine
Equipment dealer
Textile manufacturer
Cotton Gin
Pre-fab buildings
Convention Centers
Yarn Texturizer
Museum
Antique Mall
Rodeo Arena
Guest Ranch
Dry Docks Ship Repair
Physical Therapy & Gym
Vending Company
Senior Living Facility
Child Care Center
Convalescent Hospitals
Nursing Homes
Medical Offices
Veterinary Clinics

State Business Capital (SBC) is a correspondent lender that originates SBA and USDA guaranteed loans and special Conventional loans. SBC joint ventures with other lenders whereby the other lenders are the lender of record. In these cases, SBC is considered a joint venture compensated affiliate of the lender of record. SBC normally packages the SBA/USDA and Conventional loans. Since 1981 SBC has provided small business financing in conjunction with other lenders of the U.S. Small Business Administration (SBA). SBC offers real estate, equipment, construction and other financing, as well as exceptional service, to small businesses throughout the U.S. SBC’s highly trained staff members are dedicated to simplifying the loan process so you can get the financing you need quickly! SBC’s proven experience with government guaranteed business loan programs ensures that our clients receive quick, responsive service.

SBC's purpose is to arrange permanent financing for small business owners, to assist the small business owner to access capital that is not dependent upon variables beyond your immediate control, such as economic factors, re-appraisal results, the condition of other loans in the lender's portfolio, and maintenance of financial ratios.

The only function of SBC is to assist small business with the funding of U.S. Small Business Administration guaranteed loans (SBA), the U.S. Department of Agriculture guaranteed loans (USDA), and our special Conventional loans. We are well versed in the financial needs of small business and in the regulations and policies of the United States Small Business Administration since 1981. Our staff will work with you directly to obtain the information needed to process your request. If your loan request cannot fit into one of our government loan programs, we will try to place it in our Special Conventional loan program.

These businesses have in the past received SBA assistance, as defined by Federal regulation, or assistance from SBA grantees. Through hard work and unwavering commitment to excellence, these businesses have achieved outstanding success.

SBC complies with the guidelines set by the Rural Business Cooperative Service (RBCS) who begins determining eligibility for a B & I loan based on your loan request's impact on jobs in the rural community. RBCS priorities are, in order from highest to lowest, as follows:

     • Saving existing jobs or creating new jobs
     • Expanding existing businesses
     • New plant location or new business start-up
     • Business which will generate little or no permanent employment other than the entrepreneur
     • Special emphasis or rural communities with population of 25,000 or less

USDA guaranteed loans target creation or retention of jobs in less populated rural areas. The project being financed must be located in a rural area, it is not necessary for the business to be headquartered in a rural area. Rural areas include all areas of a state that are not within a city or the outer boundary of a city having a population of 50,000 or more and its immediately adjacent and urbanizing areas with a population density of no more than 100 persons per square mile. Generally the latest US census is used to determine location eligibility. Priority is given to communities and towns of 25,000 and smaller.

Any legal entity, including individuals, public and private organizations and federally recognized Indian tribal groups, may borrow. There is no size restriction on the business. Local economic development organizations can be considered. There are no owner occupied/user requirements.

While this government guaranteed program is sponsored by the U.S. Department of Agriculture, the program may be used for most types of commercial development.

These loans generally range from $2,000,000 to $10,000,000, although the USDA Rural Business Administrator may approve up to $25,000,000.

SBC will analyze your loan application based upon a combination of several factors

Collateral is generally real estate secured. All collateral must secure the entire loan. Repayment must be reasonably assured. Personal and corporate guarantees are required. A qualified appraisal report is required on property that will serve as collateral & must meet FIRREA requirements.

RBCS looks for quality loans that will support a stable employment source. The factors that RBCS reviews to determine loan quality include:

If your business falls within one of the following categories, it is ineligible for a B&I loan.

     • Lending and investment institution or insurance company
     • Charitable or educational institution
     • Church, church-sponsored or fraternal organization
     • Community antenna television service or facility
     • Business establishment when more than 10% of annual gross revenues comes from legalized
        gambling activities, such as a racetrack
     • Golf course

Your B&I loan request will be considered ineligible if you intend to use proceeds to:

A one-time guarantee fee of 2 percent of the guaranteed portion of the loan is paid by the borrower (1.4% to 1.6% of the loan amount). A 1% fee may be allowed if the loan is for a high-impact business or is located in an economically distressed community. Typical lender costs may also be incurred. Other loan closing costs normally associated with a business loan will also be incurred. Loan cost normally can be included in the loan.

A minimum of 10 percent tangible balance sheet equity is required at the time of issuance of the Loan Note Guarantee. 20% to 30% tangible balance sheet equity is required for new businesses. Equity is developed in accordance with generally accepted accounting principles. Feasibility studies may be required.

Most USDA lenders require at least 10% capital injection. So, if you want a loan for $2,000,000, the lender will expect you to contribute $200,000. This percentage may fluctuate depending on your credit, collateral and other factors involved, but 10% is common. Additionally, some lenders may require 20%-30% if your business is a start-up because no financial history exists to support the business' success, which will increase the lender's risk.

Interest rates for loans may be fixed or variable. The rate is negotiated between the lender and borrower and is similar to those rates customarily charged to other borrowers in similar circumstances. Variable rates cannot be adjusted more than quarterly. The rates are generally floating relative to Prime (lowest current New York Prime as published in The Wall Street Journal - not a higher Bank Prime), plus 1%-2%, adjusted quarterly).

Lender addresses the business adequacy of equity, cash flow, collateral, history, management, and the current status of applicable industry in a written credit analysis.

     • Adequate cash flow to meet debt obligations and operating expenses
     • Adequate collateral value
     • Life insurance on key principals
     • Personal guarantee required for owners with 20% or more ownership

Borrower should posses management ability and experience in the field, feasible business plan, ability to generate cash flow profit, adequate equity committed or net worth in existing business and adequate collateral. Minimum tangible balance sheet equity, as defined by GAAP, is 10% for existing businesses and 20% for new businesses; however, additional equity may be required. Owners of the business must be at least 51% owned by persons who are either citizens of the USA or reside in the USA after being legally admitted for permanent residence. Collateral is normally a combination of real estate, equipment, inventory, accounts receivable and the loan to value is normally 80% maximum on real estate, 60% to 70% maximum on equipment and 60% maximum on inventory and accounts receivable. Debt service coverage is normally 1.2 minimum. Interest rates are normally variable from prime + 1% to prime + 1.5%, depending on the project. Processing time for the USDA state office is normally 3 weeks.

We share information submitted to us with those we represent and only in accordance with strict internal security standards, confidentiality policies and applicable laws. We do not share client information with other companies except in order to conduct our business, to comply with applicable law, and to protect against fraud. For privacy and security reasons all information that you submit to us is stored in our corporate computer files which are offline and only accessible to SBC.

After reviewing the loan, if you feel you fit the loan parameters and want to pre-apply, complete the "Express Loan Pre-Application" by clicking the "Pre-Apply" button below this paragraph, or at the top left of any page in the green border on our web site. An SBC representative will get back to you within a few days of receiving your application.

There is no fee to pre-apply
No additional documents and No credit reports
are required at this stage

The best way to know if we can assist you to obtain an SBA loan is to complete our online "Express Loan Pre-Application" by clicking the "Pre-Apply" button above this paragraph. We'll respond with our opinion/decision within a few days.

If you want an answer to a simple question or prefer to not complete the online application, please contact us by e-mail below:

We can best serve you when you answer the following questions in your e-mail:

Due to heavy volume, initial contact with SBC should only be by completing the Pre-Application form or by Email. Our Email address is accessed by clicking on the "Email link" below. Thank you for your patience and understanding.

USDA LOAN INDEX