Merchant has $1MM SBA 7A and wants $500,000 working capital
Merchant has $1MM SBA 7A and wants $500,000 working capital
O/O restaurant with tenants - collateralize by his property
Merchant hates the SBA 7A Rate, that it adjusts every 3 months and that it collateralizes all business assets.
So I suggested we create a new LLC, pay off the SBA 7A - get it completely out of the business.....remove that debt from the balance sheet.
He wants to franchise his restaurant model - and a $1MM SBA doesn't help that By removing the SBA loan and replacing it with a lease to the new LLC, it makes his restaurant concept more attractive.
We created a new LLC. Submitted the file for a cash out real estate loan using their lease agreements (like DSCR)
Got an approval for $1MM. Pushed the lender and got it increased to $1.25MM
Cleared to close at that and will request another $100K when cleared.
So the new LLC will have $200K plus to lend to the restaurant for working capital as it's needed. Restaurant has eliminated $1MM in debt.
The loan is on his real estate 10.375% fixed for 3o years no prepayment penalty
Steve Benjamin
Professional Business Loans
Irvine, CA 92620
949-228-1050