| Eligibility |
- For-profit businesses
- Small business qualification by SBA guidelines
- Size varies by industry type
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- Existing, for-profit businesses
- Net worth $7MM or less
- Net profits after taxes $2.5MM or less
- One job created for every $50,000 in SBA loan funds
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| Loan Size |
- SBA loan guarantee cannot exceed $3,750,000
- Loan ceiling of $5,000,000
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- From $100,000 to $350,000
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- From $150,000 to $8,000,000
- Maximum SBA loan $5,000,000 for job creation/community development goals, or public policy goals, or eligible manufacturers
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| Use of Proceeds |
- Land
- Buildings
- Machinery and Equipment
- Purchase Business
- Inventory
- Working Capital
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- Land
- Buildings (new purchase, new construction or renovation)
- Machinery and Equipment (minimum useful life of 10 years)
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| Financing |
- Provided by Bremer
- SBA provides 85% guarantee to Bremer on loan amounts of $150,000 or less; 75% guarantee on loan amounts of $150,000 or more
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- Provided by Bremer
- SBA provides 50% guarantee
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- 50% financed by Bremer
- 40% SBA loan through Certified Development Co.
- 10% borrower injection (increased injection required on new businesses or special-purpose real estate)
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| Collateral |
- SBA requires Bremer to take a secured interest in business assets and/or a mortgage on real estate
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- Bremer holds first mortgage on real estate, and/or secured interest in equipment and machinery.
- SBA holds second mortgage on real estate, or second secured interest in equipment and machinery
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| Underwriting Requirements |
- Personal guaranties by all owners of 20% or more
- Adequate business collateral or personal assets securing personal guaranty (example: mortgage on home)
- Hazard Insurance
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- Personal guaranties by all owners of 20% or more
- Life insurance on business principals in amount of SBA loan
- Hazard Insurance
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| Loan Terms |
- Working Capital (up to 10 years)
- Equipment (up to 10 years or useful life)
- Real Estate (up to 25 years)
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- Revolving line of credit (up to 3 years)
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- Bremer loan - minimum 10 years on Real Estate; 7 years on Machinery and Equipment
- SBA loan - 20 years
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| Interest Rates |
- Variable rates based on WSJ Prime
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- Variable rates based on WSJ Prime
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- Bremer loan - negotiated rate between borrower and Bank(fixed or variable)
- SBA loan - below market fixed interest payment, loan rate set when debenture is sold
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