Live SBA Loan Brokers- Interview With Viso Business Capital Founder Heather Endresen
Dec 11, 2023
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Heather Endresen, with decades of experience in SBA loans, shares insights on the role of brokers, risk assessment, working with lenders, and the importance of business valuations in deals. The episode also covers the challenges of non-brokered deals, the relationship between brokers and banks, and the benefits of hiring a broker to sell a business. A must-listen for US entrepreneurs seeking capital.
Loan brokers provide valuable services to borrowers by offering a range of options and guiding them through the application process.
Banks consider factors such as debt service coverage ratio, creditworthiness, and industry risk when evaluating SBA loan applications.
Loan brokers help borrowers find lenders whose credit criteria align with their specific needs, saving time and improving their chances of success.
Deep dives
Benefits of Using a Loan Broker for SBA Loans
Loan brokers, especially those specializing in SBA loans, provide valuable services to borrowers. They have relationships with multiple banks and understand each bank's specific lending criteria and preferences. Loan brokers bring borrowers a range of options and help match them with the most suitable lender. They also guide borrowers through the application process, ensuring that the necessary documentation is complete and in line with the bank's requirements. Additionally, loan brokers advocate for borrowers throughout the underwriting and closing process, helping to resolve any issues that may arise.
Key Factors in SBA Loan Approval Process
When evaluating SBA loan applications, banks consider various factors. One critical factor is a borrower's debt service coverage ratio (DSCR), which demonstrates their ability to repay the loan. Banks also examine the creditworthiness and financial history of the business being purchased. Additionally, the bank assesses the borrower's personal liquidity and assets to understand their ability to contribute to the transaction. Another important aspect is the industry of the business and its associated risk factors. Brokers help borrowers navigate these factors and find lenders who align with their specific needs and circumstances.
Understanding the Differences Among Lenders for SBA Loans
It is crucial for borrowers to comprehend that lenders have different risk appetites and loan preferences. While SBA loans follow a standardized set of rules, individual banks often have their own particular credit criteria. These criteria can include minimum debt service coverage ratios, loan sizes, acceptance of certain licensing requirements, and preferences regarding real estate collateral or investor involvement. Loan brokers assist borrowers by matching them with the lenders whose criteria best aligns with the specific details and needs of their acquisition. The expertise of loan brokers helps borrowers avoid wasting time approaching lenders who may not be suitable for their particular situation.
Limitations of SBA Startup Loan Financing
Obtaining SBA loans for startups can be challenging due to strict lending criteria. While recent changes may have relaxed certain requirements, most lenders still demand significant personal liquidity and collateral from borrowers as security. Startups with unproven financial track records may face additional obstacles in securing financing, unless they have strong relationships with lenders or favorable dynamics such as franchise affiliation. It is crucial for entrepreneurs seeking startup financing to explore all available avenues and consult with experienced loan brokers or advisors who specialize in startup funding to improve their chances of success.
The Role of Loan Brokers and the Importance of Proper Packaging
Loan brokers play a critical role in connecting borrowers with suitable lenders for SBA loans. They simplify the application process for borrowers by gathering and organizing the necessary documentation, including financial statements and business plans. Additionally, brokers assist borrowers in creating comprehensive data rooms that present all relevant information to lenders in a clear and standardized format. Proper packaging enhances lenders' understanding of the transaction and helps borrowers secure better loan terms. Loan brokers also provide guidance on structuring the loan application, timing, and communication with lenders, ensuring a smoother and more efficient process.
New Livestream guest- Heather Endresen
I’m happy to have Heather join me on a live broadcast.
Heather Endresen has decades of experience in helping people obtain SBA loans while working as a banker.
She’s now got her own brokerage up and running and is helping entrepreneurs in new ways.
Tune in and as we’ll be discussing how SBA loan brokerage works and what the advantages of a broker can be.
This is a ‘must see event’ for US entrepreneurs who want to learn all the tricks to accessing capital.
Find Heather online at
https://www.linkedin.com/in/heather-endresen/
https://twitter.com/EndresenHeather
https://visocap.net/
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