{"id":115,"date":"2014-05-14T17:04:30","date_gmt":"2014-05-14T17:04:30","guid":{"rendered":"\/blog\/?p=115"},"modified":"2014-05-14T18:17:11","modified_gmt":"2014-05-14T18:17:11","slug":"sba-le","status":"publish","type":"post","link":"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/","title":{"rendered":"SBA Lending to the Middle Market"},"content":{"rendered":"

\"OLYMPUS<\/a>Ever since the SBA raised the loan limit in its flagship 7a program to $5MM, we have seen a number of opportunities to extend the SBA\u2019s assistance to middle market companies seeking to restructure their debt under more cash flow sensitive terms.\u00a0 There tends to be a misconception that SBA assistance is strictly for start-ups or \u201cmom and pop\u201d businesses.\u00a0 However, we have utilized the SBA program to assist larger companies, often those that are large employers in the communities we serve.\u00a0 A middle market company of $20MM in sales often has a large real estate facility and\/or significant equipment needs, especially when facing a turnaround situation or adverse relationship with their bank.\u00a0 While there are many ABL lenders to service these companies\u2019 working capital and revolving credit needs, restructuring long term debt and extending some permanent working capital utilizing the hard assets is often a need that goes unmet.\u00a0 That\u2019s where an SBA loan can make a lot of sense.\u00a0 SBA allows equipment debt to be financed over 10 years and real estate debt over 25 years.\u00a0 Throw in some permanent working capital to pay down a \u201cstagnant\u201d line and a borrower could change the complexion of its balance sheet dramatically.\u00a0 The problem is most SBA lenders have structured their departments to service the previously mentioned market of start-ups and \u201cmom and pops\u201d.\u00a0 There is nothing wrong with this but if a lender truly wants to leverage the SBA programs to serve the middle market, they will need experienced lenders who know both commercial lending AND<\/span><\/b> SBA Standard Operating Procedures (SOP).<\/p>\n

If a lender specializes in Hotel lending, they need to analyze ADR, Occupancy and Rev PAR.\u00a0 If they like gas stations, they need to look at traffic counts, gallonage, egress and jobber agreements.\u00a0 Similarly, lenders that want to work with middle market companies need to understand current ratio, advance rates, UCA cash flow, inventory turns, A\/R and A\/P turns just to name a few.\u00a0 Given the SBA increase in their loan limit to $5MM in 2010, the middle market presents a great opportunity to extend much needed long term credit.\u00a0 \u201cMiddle Market\u201d no longer means \u201ctoo big\u201d for SBA.\u00a0 With a size limit of $5MM in net profit and $15MM in net worth, the SBA programs can now serve this market.\u00a0 Lenders just need to adapt.<\/p>\n","protected":false},"excerpt":{"rendered":"

Ever since the SBA raised the loan limit in its flagship 7a program to $5MM, we have seen a number of opportunities to extend the SBA\u2019s assistance to middle market companies seeking to restructure their debt under more cash flow … Read More »<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[15,17,16],"class_list":["post-115","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-middle-market","tag-sba-7a","tag-sba-loans"],"yoast_head":"\nSBA Lending to the Middle Market - 44 Business Capital Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SBA Lending to the Middle Market - 44 Business Capital Blog\" \/>\n<meta property=\"og:description\" content=\"Ever since the SBA raised the loan limit in its flagship 7a program to $5MM, we have seen a number of opportunities to extend the SBA\u2019s assistance to middle market companies seeking to restructure their debt under more cash flow … Read More »\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\" \/>\n<meta property=\"og:site_name\" content=\"44 Business Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2014-05-14T17:04:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2014-05-14T18:17:11+00:00\" \/>\n<meta name=\"author\" content=\"Greg Poehlmann\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Greg Poehlmann\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\"},\"author\":{\"name\":\"Greg Poehlmann\",\"@id\":\"https:\/\/www.44businesscapital.com\/blog\/#\/schema\/person\/f31b9e7d419b987333a51f98c638f730\"},\"headline\":\"SBA Lending to the Middle Market\",\"datePublished\":\"2014-05-14T17:04:30+00:00\",\"dateModified\":\"2014-05-14T18:17:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\"},\"wordCount\":396,\"keywords\":[\"middle market\",\"SBA 7(a)\",\"SBA loans\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\",\"url\":\"https:\/\/www.44businesscapital.com\/blog\/2014\/05\/sba-le\/\",\"name\":\"SBA Lending to the Middle Market - 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