How do you evaluate cash flow and revenue?
For businesses that have been in operation for two or more years, cash flow eligibility is based on EBITDA for those two years. Revenue is based on the average gross sales revenue of the past two years. EBITDA = net income + interest + depreciation + amortization
What are the UCC requirements?
The new loan’s lien position on all business assets (ABA) must be fourth or lower to qualify. All UCCs must correspond to the business’s debt schedule. For any UCC filings not listed on the debt schedule, borrowers must provide either the terms of liability or the UCC3 termination statement from the lender.
Is there a revolving debt limit?
There is no revolving debt limit.
Do you require debt refinance?
If short-term, high-interest rate debt exists and is eligible for refinance based on the date taken out, NEWITY + Northeast Bank require it to be refinanced with an SBA loan. However, MCA loans cannot be refinanced and thus are not required to be refinanced with an SBA 7(a) loan. If the borrower does not wish […]
If a borrower has an existing SBA loan, can they get another one through NEWITY?
If a borrower has an existing SBA loan that was originated in the past 12 months, the borrower must meet requirements for the new proposed total loan amount to qualify for a new SBA loan through NEWITY + Northeast Bank.
Do prequalified loan amounts change in underwriting?
Yes, a prequalified SBA 7(a) loan amount may change in underwriting. Typically, this occurs due to outstanding debt. In many instances, the applicant can still receive an SBA loan at a lower loan amount. If the loan amount is reduced, the team will notify the client directly and seek confirmation whether to proceed with underwriting […]
Do required years in business vary by industry?
Yes. Generally, businesses need a minimum of 2 years in business to qualify. Businesses in the construction industry require at least 4 years to be eligible.
What can my client expect at closing and when does funding occur?
During closing, business owners will need to perform identity verification through our secure system and confirm account instructions. If the loan amount is over $50,000, the business must provide specific proof of insurance at closing as outlined in the Insurance FAQ. Without properly completed insurance certificates, the application cannot advance to funding. Once all closing […]
How does debt refinancing impact the closing process?
There are two scenarios for loan disbursements that incorporate refinancing debt: 1. Credit Card or Line of Credit Refinance – Depending on the language within the payoff letter, the bank will either pay off the balance directly or wire the funds to the borrower to pay off. Upon receipt of proof that the account is […]
How does business-owned real estate impact the closing process?
The SBA requires banks to take title to property(ies) if there is over 25% equity. There are two instances in which the lender is required to take title to the real estate: 1. If the real estate is owned directly by the business (business name is on the title) 2. If the guarantor(s) have ownership […]