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How You Can Successfully Navigate the SBA Loan Process

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About the Episode

SBA loan expert Tom Lyons talks about everything related to SBA loans. He discusses recent changes to SBA guidelines, such as allowing partial ownership changes and zero down payment options. Tom shares advice and insights into the process of acquiring a business, qualification and compliance challenges, guidelines for an owner to remain involved in the business, contingent seller notes, how landlords impact the loan terms, and the importance of working with a preferred lender for smoother compliance and approval.

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“The first bit of advice – make sure you are talking with an SBA-preferred lender.”

Tom Lyons

What You’ll Learn

  • Preferred Lender: Find out about the different types of lenders, why it’s essential to work with a preferred lender, and the benefits they can provide compared to a general program lender.
  • SBA Guidelines: Gain insights into some recent changes to SBA guidelines, including the ability to do partial ownership changes and relaxed down payment requirements.
  • Qualifications: Learn about the essential requirements for SBA loans, such as the need for a third-party business valuation and SBA-compliant lease agreements.
  • Application Process: Get an outline of the step-by-step process of applying for and obtaining an SBA 7(a) loan, including the timeline and key milestones.
  • Tips: Get insights into common challenges and considerations when navigating the SBA loan process, such as dealing with landlords and ensuring compliance with complex regulations.

Topics Covered

Why is it important for a borrower to work with one of the preferred lenders? [4:10]
What is the SBA 7(a) loan, and how does it differ from other SBA loans? [6:45]
Is it easier to apply for an SBA 7(a) loan than a standard bank loan? [8:33]
What are some of the most recent changes to the SBA guidelines? [15:21]
What are the essential qualifications that must be met? [26:25]
How does the third-party business valuation work? How do landlords factor in? [28:33]
What are the limitations around a seller remaining involved in the business? [34:54]
What documents are needed? What should the buyer expect through the process? [39:34]
Term sheet versus commitment letter – what’s the difference, and when does each happen? [43:54]
Who are the various people involved on the lender’s side? What are their titles and roles? [47:12]

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Meet Our Guest

Tom Lyons

Tom Lyons

Senior Vice President in the Small Business Capital division, Byline Bank | WI, USA

Tom Lyons is an SBA loan officer. In 10 years of working exclusively in government-guaranteed lending with Byline Bank, Tom has approved and closed over 112 deals for a total of $174 million. These loans have helped preserve over 200 jobs via refinance deals to companies in turnaround situations, included over 25 deals to other businesses either in startup or expansion mode, and facilitated 47 business acquisitions.

LinkedIn LinkedIn: https://www.linkedin.com/in/thomas-lyons-924ba45/

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