Lehman Brother Small Business Finance

Lehman brothers small business finance are meant to meet the local small business needs. The process offers customer an experienced, professional, and ethical approach to deliver timely transaction closings. It is one of the quickest and simplest loan application process in the industry.

Approvals are done within five business days and closings within thirty business days from receipt of completed loan package. The borrower can determine his own lease payments for the business with advantages of seller financing to be part of down payment. Origination cost is lower than SBA financing and affiliate company guarantees not always required. The customer can get up to 90% loan-to-value conventional financing without SBA eligibility and occupancy restrictions. The loan can amount to $5,000,000 and even more at competitive rates, fast, reliable and simple loan commitments.

A small business is the one who does not have a tangible net worth in excess of $7 million, average net income in excess of $2.5 million after tax for proceeding two years.

The business must project equity in line with industry, good credit and demonstrate repayment ability from business historical tax returns. The payments are required to be as per schedule per month as automatic debit only on the first day of each month.

The brief snapshots about SBA loan program:-

SBA 504 loan program:-

SBA 504 loan program is for a cooperative venture between two lenders to provide 90% financing for business real estate. The fund availability is limited by annual congressional appropriation from $1,500,000 to $4,000,000 for the term limited to twenty years and meant for acquisition financing only. The loan is a second lien limited up to 90% CLTV, with 51% occupancy requirements.

SBA 7A Loan Program:-

This loan can be in first and second lien position, for a term of 25 years with 90% financing typically. The loan is for acquisition of real estate or limited refinance, with maximum loan amount $2,000,000.

The various loan programs available with Lehman brothers are:-

1) Owner user Full documentation:

This loan is designed for owner-user commercial properties which are over 25% owner occupancy. The eligible commercial property types include multi-purpose and mixed-use. The loan amount up to $ 5 million with 90% financing for 30 years full amortized (no balloon). It carries features of flexible prepayment at fixed, floating and hybrid rates along with low owner occupancy requirements. The minimum average FICO score required is 600.

2) Owner user - Stated income:

The loan amount up to $ 2 million (at 60% LTV) financing for 30 years fully amortized (no balloon) commercial properties occupied over 25% by an established operating company. However, no tax returns, financial or tax verification necessary. It carries features of flexible prepayment at fixed, floating and hybrid rates on required minimum average FICO score of 700 for 90% financing (on loan up to $ 1 million).

3) Investor Full documentation:

This loan is designed for commercial properties with owner occupancy under 25%. The loan amount up to $ 3 million with 80% LTV on building purchases for 30 years fully amortized (no balloon). It carries features of fixed, floating and hybrid rates on cash-out refinances up to 65% LTV. The minimum FICO scores of at least 660 for refinance and 680 for purchases of 80% LTV is required with no more than 15 tenants, major tenants over 25% of GPI should have at least 3 years remaining on lease term.

4) Investor Low documentation:

This loan is designed for commercial properties with owner-occupancy under 25%. The loan amount up to $ 2 million (at 60% LTV) and up to 80% LTV on building purchases for 30 years fully amortized (no balloon). However, no tax returns, financials or tax verification necessary. It is available on features of fixed, floating and hybrid rates with cash-out refinance up to 65% LTV.

To qualify for this loan borrower has to have a minimum average FICO score of at least 660 for refinance and 680 for purchases of 80% of LTV or lower. The borrowers also need to provide evidence of 2 years in business owning at least 50% commercial real ownership experience within past five years duration.

5) Alt-A (Stated Income):

This loan program is for commercial properties occupied over 25% by an established operating company. The maximum first mortgage loan amount to $2,000,000 and 90% LTV (purchase) , 70% LTV (refinance), 65% LTV (cash out) with combined LTV to 90%. The minimum FICO scores of at least 660 for refinance and 650 for purchases of 65% LTV or lower is required. The borrower should be in business for a minimum of 2 years and occupy greater than 25% of subject property. However, no tax returns or financial statements are required , but proof of timely commercial rent on mortgage paid for last 12 months is needed.

6) Alt-A Express (Stated Income):

For commercial properties occupied over 50% by an established operating company on LTV under 80% and for LTV 80% or greater requires over 75% occupancy. The first mortgage loan can amount up to $1,000, 000 and up to 90% LTV (purchase), 70% LTV (refinance). The minimum FICO scores of at least 660 for refinances and 650 for purchases of 65% LTV or lower is needed. However, no tax returns or financial statements are required but, proof of timely commercial rent or mortgage paid for last 12 months is needed.

On comparison Lehman brothers small business finance simplifies the loan process as:-

1) Owner occupancy repayments are typically 25% or more of the building as compared to SBA process of 51-67% owner occupancy needed.

2) In SBA processes cash-out transactions are not allowed, but Lehman brothers small business loan cash-out refinances up to 75% LTV with proceeds used for any purposes.

3) For Lehman brothers small business loan require no SBA approval and is prudent flexible in approving loans. On the selected basis, the process can eliminate certain corporate guarantees. Also, borrower can determine their own lease payment for their business.

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