Focus Business Bank is an active SBA lender, which is headquartered in San Jose. We participate in the SBA 7a and SBA 504 loan programs. The SBA 7a Guarantee loan program is for the purchase or construction of commercial real estate, business acquisition financing, working capital, debt refinance, and equipment financing. The SBA 504 program is for commercial real estate financing for owner-user small businesses.
Focus Business Bank is a Preferred Lender (PLP), which allows the bank to streamline the approval process, which gives us advantage over other lenders to close loans quicker and provide clients with needed capital.
The Bank’s SBA Department is run by Brad Lebsack who has been involved in SBA lending for twenty years, which includes the past fourteen years in the Bay Area. The SBA Department has over fifty years of combined experience in SBA lending. Mr. Lebsack has achieved PLP status at four lending institutions and is familiar with SBA rules and regulations. SBA rules can be complex, therefore, we can analysis a package quickly and determine what is needed to fund the loan.
Business Acquisition Financing
The Bank’s primary lending area is the Bay Area but we also provide financing throughout Northern California. We consider all industries to lend including retail, manufacturing, wholesale, and service sectors. We are a cash flow lender and need to demonstrate on a global basis that there is sufficient cash flow to not only service business debts but also the buyer’s personal debts.
We analysis the existing seller’s tax returns to determine if the purchase price is reasonable and also review the buyer’s financial status. On a buyer we review the buyer’s personal credit history, annual personal debt service, and if they currently own any other businesses.
We have four criteria we look at in business acquisition financing:
1) Sufficient down payment from the buyer. We typically provide up to 80% financing, therefore, the down payment from the buyer is 20%. In some transactions seller financing is involved which could involve 10% down from buyer and 10% seller note. We also like to see sufficient “training period” from the seller which can be from two to six months. In addition to the down payment the buyer also needs to have sufficient liquid reserves for personal purposes.
2) Excellent credit history from the buyer. Since we have no experience with the buyer we look closely at the buyer’s personal credit history.
3) Management experience from the buyer. If the buyer has previous ownership experience that is a plus or has been an employee in the same industry as the business they are purchasing.
4) Collateral. We will take the business assets as collateral but SBA also requires us to take the buyer’s personal real estate collateral. SBA requires that all available collateral be pledged up to the liquidation value of the loan.
Reach Brad Lebsack direct for SBA loan financing at: 408-200-8718
