Link Funding, Inc.

SBA Guaranteed Loans



The U.S. Small Business Administration, through its 7a program, provides guarantees to banks for loans to small businesses.  Highlights of the program:

        >Maximum loan amount is $5,000,000
        >Typical guaranteed amount is 75%
        >Interest rates typically are adjustable based on Prime, but other pricing is possible
        >Loan terms usually between 7 years and 25 years and must be fully amortizing
        >Loan purposes for almost any business purpose, including acquisition or refinance of
          fixed assets, working capital and/or business acquisition.

In addition to the credit enhancement provided by the full faith and credit guarantee, there are valuable other benefits of the program:

Income from loan sale and servicing:    There is an active secondary market for the guaranteed portions of the loan.  Depending on pricing and term, the premium can easily exceed 110.  In addition, the bank retains servicing and receives a 1% fee annually on the guaranteed portion.  We can show you the math in detail, but a typical loan with an average premium generally shows a return on invested funds (the unguaranteed portion) of well over  20%.And this return include the revenue on the spread between your cost of funds and the interest on the unguaranteed portion of the loan.

Attract and retain bank customers.  The SBA program enhances your ability to attract and retain customers and their deposit and merchant relationships by giving you more flexibility in your loan products.  Higher LTV's and longer terms become possible.  Also, because the guaranteed portion of the loan does not "count" towards your lending limit, you can make larger loans and loans to existing customers that already are near their limit. 

In this competitive environment,
 why not use any advantage that you can to promote business and profits?  
We can show you how!