Who is Eligible for Conventional Loans?
When it comes to financing your business, you have two primary options: SBA loans and conventional loans. We will look over your business needs, credit score and financial situation to decide the best possibility for you.
Why Conventional?
- Are not guaranteed by the federal government.
- Shorter repayment terms between 5 to 10 years
- Have a fixed rate generally locked for 5 years at the T-Rate then resets after 5 years at the new T-Rate
- Stricter on qualification requirements
- Lower loan amounts due to buyer and seller equity injection requirements
- Life insurance required for the loan
Use of Proceeds
- Commercial real estate (purchases, construction, or refinance)
- Leasehold improvements
- Business expansions
- Machinery, equipment, furniture or fixtures
- Business acquisition
- Working capital (offered in conjunction with some of the above)
- Start-ups
Conventional Requirements:
- Credit Score 700 or higher
- Business History
- Collateral on business assets
- Down Payment 10-20% of purchase price
Other Credits Considerations
- Business must have adequate historic cash flow to cover the proposed debt
- Business debt to net worth must meet industry averages
- Borrowers must be actively involved in the day-to-day operation of the business
- Satisfactory personal credit histories are required for all principles and guarantors
