Wednesday, October 21, 2009

$5 Million SBA Loans if Your Name is Joe or Doug

Is the SBA considering increasing its guarantees for the SBA 7a loans program for loan amounts as high as $5 million?

Yes. But I think only if your name is Joe or Doug.

Here's a portion of what President Obama had to say about his thoughts on changes for the SBA ...

"The first thing we need to do is increase the maximum size of various SBA loans. So I am calling on Congress to increase the cap on what's called 7(a) loans to $5 million. These are the loans most frequently handed out by the Small Business Administration to help folks open their doors and buy machinery, equipment, land and buildings. These larger loans will help more small business owners and franchisees grow. We also need to increase the maximum size of what's called 504 loans to $5 million. These are the type of loans that Joe and Doug used to expand this business and create new jobs. And we should also increase the maximum size of microloans that go to start-ups and other smaller businesses."

By the way, the expectation remains that the current SBA loan stimulus money will be exhausted by the end of 2009. Don't wait if you want to take advantage of the current higher SBA guarantees and waiver of SBA loan guarantee fees.

Need help finding the right SBA lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : SBA loans , 7a loan , SBA lender , business loans , equipment loans , credit crunch

Thursday, October 08, 2009

Commercial Real Estate - More Pain Ahead

Commercial real estate losses could reach 45 percent next year according to an internal presentation at The Federal Reserve Bank.

As reported in The Wall Street Journal (subscription required), while not the central bank's formal opinion, the presentation by Atlanta Fed real estate expert, K.C. Conway, paints a bleak picture of sliding real estate values, increasing commercial real estate loan defaults and enormous amount of debt that will need to be re-financed in the next few years.

Banks have been slow to take losses on their commercial real estate loan portfolios because their balance sheets still have not recovered from their housing loan related losses. "Extend and pretend" has been the philosophy of some banks whose primary focus is capital preservation and avoiding enforcement actions by regulators.

I have personally seen three bank commercial real estate loans in recent weeks where the banks are in trouble on construction loans and first trust deeds gone sour. I'm working on sale leaseback solutions on two of the three that will necessitate the banks taking a significant discount on the loans. On the third, the value of the property is so low relative to the loan balance, it's not clear where the solution lies.

Need help finding the right lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : commercial real estate loans , commercial real estate , bank failures , real estate bridge loans , private money loans