Latest / Own More Doors / #25 The Ultimate Guide to SBA Loans (Brandon Sandler, Live Oak Bank)

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#25 The Ultimate Guide to SBA Loans (Brandon Sandler, Live Oak Bank) · Own More Doors

0:00
SPEAKER_00: What's up everyone?
0:00
SPEAKER_00: Juan Weezar here with the Own More Doors Podcast.
0:03
SPEAKER_00: This specific episode was first shared on our YouTube channel, Sage Real Estate.
0:08
SPEAKER_00: Check it out.
0:08
SPEAKER_00: And we're excited to bring it to you here.
0:11
SPEAKER_00: We hope you enjoy the interview.
0:13
SPEAKER_00: If you're a business owner, you must tune in today.
0:15
SPEAKER_00: We're going to talk about financing of businesses, acquisition of partnership buyouts, buying real estate.
0:21
SPEAKER_00: Tune in today while we do a deep dive into SBA.
0:24
SPEAKER_00: Now, in the past, you need a 10% down to buy a building.
0:27
SPEAKER_00: Well, we're going to talk to someone today who's going to show us how you could buy a building, how you could even renovate the building, all with uh nothing down, so long as you have a business that's up and running.
0:38
SPEAKER_00: So tune in today.
0:39
SPEAKER_00: I hope you enjoy the show.
0:41
SPEAKER_00: Hey everyone, I'm super excited to be interviewing Brandon Sandler with Live Oak Bank.
0:46
SPEAKER_00: Brandon, I I have you in today.
0:48
SPEAKER_00: Thanks for coming in, by the way.
0:49
SPEAKER_00: Happy to be here.
0:51
SPEAKER_00: We met recently, and and Brandon's been doing SBA loans for over 20, 30 years.
0:56
SPEAKER_00: And so this is all he does.
0:58
SPEAKER_00: And so if you're a business owner, definitely tune in because we've done SBA videos before, but we've never done one like this.
1:05
SPEAKER_00: And the one thing that stood out in the past, when I've done my other videos, we've always said to get an SBA loan, the business owner needs to come up with 10% down.
1:16
SPEAKER_00: With Liebook Bank, they actually have a program where you don't even need the 10% down, essentially giving us 100% financing.
1:24
SPEAKER_00: So today we're going to do a deep dive into SBA loans, who's utilizing them, who's it good for, and we'll learn about 100% financing when it comes to SBA.
1:33
SPEAKER_00: Brandon, thanks for being here.
1:34
SPEAKER_00: Yeah.
1:34
SPEAKER_00: I appreciate it.
1:36
SPEAKER_00: Talk to us about what type of client do you deal with who's a perfect candidate for an SBA loan?
1:43
SPEAKER_00: Sure.
1:44
SPEAKER_00: What do they look like?
1:45
SPEAKER_01: It's actually a very big range.
1:48
SPEAKER_01: So it's someone who owns a business, first of all.
1:52
SPEAKER_01: And when we're talking about SBA lending specifically within the real estate world, the business has to occupy the real estate.
2:02
SPEAKER_01: So really, as long as they're a business owner, it's something that we can look at financing.
2:10
SPEAKER_01: But SBA does more than just loans on real estate.
2:14
SPEAKER_01: You can buy a business, you can start a business, you can buy inventory equipment, we can give you working capital, we can do things like partner buyouts.
2:26
SPEAKER_01: So it's a pretty big range of what SBA actually does, but it's just focused on the business owner.
2:31
SPEAKER_00: Got it.
2:32
SPEAKER_00: And we'll get into partnership buyouts and that type of stuff because that's a very interesting thing.
2:36
SPEAKER_00: And so when it comes to buying real estate, what are some of the basic requirements that someone should make note of?
2:44
SPEAKER_01: Sure.
2:45
SPEAKER_01: So in general, we want the business to be open for at least two years.
2:50
SPEAKER_01: We want the most recent tax return and the current year financial statements to be on the up upswing.
3:02
SPEAKER_01: So if a company is losing money, not the right time yet, but we want them to be showing a healthy profit.
3:10
SPEAKER_01: And as long as their tax return works for last year, as long as the PL works for this year, in order to support the new loan, that's really what we're looking for.
3:21
SPEAKER_01: We do want them to have reasonably good credit, you know, typically 660, 680 scores plus, no prior bankruptcies.
3:30
SPEAKER_01: But as long as that picture looks good, as long as there's some uh some good net income on the business, it's possible that we can give them financing.
3:42
SPEAKER_00: What what type of industries do you see utilizing the SBA program for uh for purchasing real estate?
3:49
SPEAKER_01: Sure.
3:50
SPEAKER_01: Really, it's it's whatever you would see up and down Main Street.
3:54
SPEAKER_01: So it can be office, it can be retail, it can be medical, dental, veterinarian, they can own a hardware store, they can own a coffee shop, they can own uh an assisted living.
4:09
SPEAKER_01: Um some lenders will do uh gas stations, hotels.
4:16
SPEAKER_01: Um Live Oak, it doesn't really play in that space.
4:19
SPEAKER_01: Okay, but they are still SBA eligible.
4:23
SPEAKER_00: Do in in most cases when a business is looking to buy real estate with an SBA loan, are they typically buying the building that they're currently in?
4:33
SPEAKER_00: Or or is it 50-50?
4:36
SPEAKER_01: Yeah, um probably 50-50.
4:38
SPEAKER_01: We do see a lot of people who have a lease and their lease is is maturing soon, and the owner of the property says, hey, why don't you buy buy the building?
4:51
SPEAKER_01: So we see that a lot.
4:52
SPEAKER_01: Um, but sometimes people want to move or they want to get a bigger space, so they vacate their current lease and they're buying something else.
5:01
SPEAKER_00: I've always said, Brandon, if you're a business owner and you're leasing, I think you're making a huge mistake.
5:06
SPEAKER_00: Like I don't know at what point as a business owner it makes sense to not own your building.
5:11
SPEAKER_00: Like I it just to me it doesn't make sense to to be leasing, especially when we have this SBA option.
5:16
SPEAKER_00: And before I would tell people it's only 10%.
5:19
SPEAKER_00: And in this case, it can maybe be as low as 0% in terms of a down payment.
5:25
SPEAKER_00: Um talk to us about the occupancy requirement.
5:31
SPEAKER_01: Sure.
5:32
SPEAKER_01: So SBA requires that your business occupy 51% of the square footage.
5:38
SPEAKER_01: Um sometimes if you own 50%, but we can add in like storage or a garage, or as long as we have to as long as we get to that 51% um configuration of the real estate, technically you're in the box for SBA.
6:00
SPEAKER_00: Okay.
6:01
SPEAKER_00: Brandon, sometimes people will reach out to me and they'll want to buy a mixed-use building.
6:08
SPEAKER_00: And I always go back, I'm like, well, does your b business can it occupy 51%?
6:13
SPEAKER_00: And it's sometimes it can't, and then we're and then we're stuck not being able to go down the SBA route.
6:19
SPEAKER_01: So that's a good segue into something that Live Oak does.
6:22
SPEAKER_00: Okay.
6:22
SPEAKER_01: So we actually have an outside-the-box conventional product to where we can also do a non-SBA owner-occupied loan.
6:31
SPEAKER_01: So let's say you have uh a doctor who occupies 30% of the space.
6:37
SPEAKER_01: Technically, they don't qualify for SBA, but we can still finance them, usually up to 85 LTV, so 15 down, and they can still get essentially owner-user financing, just not SBA.
6:53
SPEAKER_00: That sounds like a great program.
6:55
SPEAKER_00: It is.
6:56
SPEAKER_00: It sounds like a great option.
6:57
SPEAKER_01: It is.
6:57
SPEAKER_01: A lot of banks don't offer an outside-the-box SBA product.
7:01
SPEAKER_01: Okay.
7:02
SPEAKER_01: Or, you know, non-SBA product.
7:04
SPEAKER_01: Live Oak does.
7:06
SPEAKER_00: I'm currently listing, Brandon, I'm currently listing a um an office building on Pacific Coast Highway.
7:10
SPEAKER_00: It's about 9,000 square feet, it's three floors.
7:14
SPEAKER_00: And, you know, right now, from an SBA perspective, I thought, well, someone's gonna buy it and has to occupy 51%.
7:22
SPEAKER_00: But with the scenario you just gave me, they they could occupy like a third of it, and it wouldn't matter.
7:28
SPEAKER_01: As long as that business supports the loan that they're trying to get, correct, then we still look at it as um owner-user, which in a lot of banks they would be called investor.
7:40
SPEAKER_01: Because normally you have SBA or you have investor, where you don't have that 51% rule.
7:47
SPEAKER_00: Right.
7:47
SPEAKER_01: We have that in-between middle product.
7:50
SPEAKER_00: Yeah.
7:50
SPEAKER_00: Correct.
7:51
SPEAKER_01: Okay.
7:51
SPEAKER_00: Well, uh any business owner watching this, this is you you now have zero excuse onto why you're not buying real estate.
7:58
SPEAKER_01: Buy something.
7:59
SPEAKER_00: There you go.
8:00
SPEAKER_00: Brandon, a lot of times people reach out to me and they'll say, Um, I don't have a business yet, or I'm gonna start a business and I want to get an SBA loan.
8:08
SPEAKER_00: Yeah.
8:09
SPEAKER_00: Talk to us about some of the options that you were telling me.
8:12
SPEAKER_01: Sure.
8:12
SPEAKER_01: So the startup world is a little bit quirky.
8:16
SPEAKER_01: Um, a lot of banks won't touch it.
8:18
SPEAKER_01: Some banks will, some banks want certain numbers of years of experience in that specific field.
8:26
SPEAKER_01: Um, at Live Oak, we actually have about 10 different industries where we will allow someone to start a business.
8:33
SPEAKER_01: So, for example, medical, veterinarian, dental, uh franchises.
8:41
SPEAKER_00: Okay.
8:41
SPEAKER_01: Um, that's just a few examples.
8:43
SPEAKER_01: But if somebody has relevant experience, they don't necessarily have to have exactly what they're doing, that background.
8:52
SPEAKER_01: But if they've run another kind of a business, for example, and they're gonna start going down the franchise world, that's a good model because the franchises can also show you how to do whatever they do.
9:06
SPEAKER_00: Okay, so that's a really good option.
9:07
SPEAKER_00: So medical field or anyone looking at a franchise.
9:10
SPEAKER_00: So in the past, people have reached out and and the answer was no.
9:13
SPEAKER_00: Well, the answer before that we've gotten from other lenders, and maybe to them the answer is no.
9:18
SPEAKER_00: But but but but that's why I'm bringing you guys different options.
9:22
SPEAKER_00: And and with Liboke Bank, now we have multiple options.
9:25
SPEAKER_00: And like you said, I mean, one of them is you don't have to always go down the investment, the investor route, which would require in most cases a bigger down payment.
9:33
SPEAKER_00: Um, and probably the interest rate would be higher.
9:36
SPEAKER_00: And so they kind of have that in between.
9:38
SPEAKER_00: But also, if you're in the medical field, to not have to wait a year or two to establish your business and and and go right off the bat and be able to get financing is a great program.
9:50
SPEAKER_00: Um, let's hop into some of the other programs that are very popular at your bank and just talk to me about who utilizes them.
9:56
SPEAKER_00: So let's just say partner buyouts.
9:58
SPEAKER_00: Sure.
9:58
SPEAKER_00: Give us an example of how that works and and for for anyone watching, what can they do if this is a situation that they might be in?
10:08
SPEAKER_01: So there's a number of different um sort of instances where a partner buyout works.
10:16
SPEAKER_01: So you can actually do it two ways.
10:18
SPEAKER_01: You can buy out your partnership in a business or in the real estate.
10:24
SPEAKER_00: Okay.
10:25
SPEAKER_01: So let's say you've got someone who wants to retire.
10:29
SPEAKER_01: Well, a lot of people don't realize you can buy that partner out with an SBA loan.
10:36
SPEAKER_00: I didn't know that.
10:38
SPEAKER_01: Yes.
10:38
SPEAKER_01: So we're all learning together.
10:40
SPEAKER_01: So you can do a partner buy out, you can also do a buy-in.
10:44
SPEAKER_01: So historically, SBA did not play in this world.
10:47
SPEAKER_01: As of last year, now we do.
10:50
SPEAKER_01: So you can actually buy a fraction of a company.
10:54
SPEAKER_01: So prior to this past year, it was if you were buying a business from outside, you had to buy all of it.
11:02
SPEAKER_01: Now you can just buy a portion of it.
11:05
SPEAKER_01: So that opens up the world hugely to people who maybe they don't want to afford all of it.
11:12
SPEAKER_01: Maybe they want to just buy a fraction, get their feet wet, then buy out the rest over time.
11:18
SPEAKER_01: Now you can do that.
11:20
SPEAKER_00: We get people calling us all the time and say, hey, you know, and sometimes it's a scenario where we've inherited this building, there's there's five of us, three want to keep it, two want to sell it.
11:29
SPEAKER_00: Exactly.
11:30
SPEAKER_00: And they'll call me and they'll say, Can you sell our our our shares?
11:33
SPEAKER_00: I'm like, that is nearly impossible for me to market up and then there's not that many people that want to take that on.
11:40
SPEAKER_01: Correct.
11:40
SPEAKER_00: Right?
11:40
SPEAKER_01: But in this scenario, it gives us an option to you can buy a fraction from within, like say you have an existing partner who wants to take over just a piece of the rest, or you can have an outsider come in and just buy half of it.
11:55
SPEAKER_01: Say you have a seller who isn't ready to retire, but they want to slow down, sure, they want to pare down the business, kind of set up their exit, and bring someone in or bring a few people in to, you know, groom them to take over.
12:15
SPEAKER_01: So this is the perfect way to do it.
12:17
SPEAKER_01: Whereas before, this wasn't an option.
12:19
SPEAKER_00: And then also with this option, it's someone is financing the acquisition of this portion of the business.
12:26
SPEAKER_01: Yeah, you've got a say you've got a 30% share at$500,000.
12:31
SPEAKER_01: We can finance that specific piece.
12:35
SPEAKER_00: Okay.
12:36
SPEAKER_00: Anyone watching, please feel free to reach out to to either me or Brandon directly.
12:41
SPEAKER_00: We'll make sure to have his information in the notes.
12:44
SPEAKER_00: Um, Brandon, talk to us about another popular program that that we could share with our folks today.
12:49
SPEAKER_01: Sure.
12:50
SPEAKER_01: So we haven't really gone down the 100% rabbit hole yet, so let's just let's just take a minute and talk about that.
12:56
SPEAKER_01: Sure.
12:57
SPEAKER_01: So this is under the 7A SBA product.
13:01
SPEAKER_01: So what 7A is, it's one loan with the bank.
13:05
SPEAKER_01: Technically, there's no SBA involvement on the surface, just looks like it's a it's a bank loan with you and Live Oak.
13:15
SPEAKER_01: And up to$5 million, we can finance potentially 100% of the product or of the price.
13:24
SPEAKER_01: Okay.
13:24
SPEAKER_01: We can also include things like cosmetics.
13:28
SPEAKER_01: You want to get some money for flooring, for some inventory, you want to redo the driveway.
13:35
SPEAKER_01: Um, we can even include major renovations.
13:40
SPEAKER_01: So, in theory, it's possible if the rest of the file looks good, you can buy a building, do improvements for minimal cost out of pocket.
13:52
SPEAKER_00: What's amazing to me is that if you wanted to go buy a house with 0% down, that's not even possible.
13:58
SPEAKER_00: Oh, it doesn't happen.
13:58
SPEAKER_00: It doesn't happen.
13:59
SPEAKER_00: And here we're telling you as a business owner, these options exist.
14:04
SPEAKER_00: And here's the one thing I've always seen.
14:06
SPEAKER_00: Like, uh, you know, anyone who's a business owner has has decided I'm either gonna sink or swim and and and make this happen, right?
14:13
SPEAKER_00: But but because I'm around a lot of entrepreneurs and business owners, once they get a little success in their business, they realize that they are they can be successful in other things.
14:23
SPEAKER_00: And and I see this all the time where someone might be successful in their business and now they become successful in owning real estate.
14:29
SPEAKER_00: And this just gives them an option of buying more real estate if it meets the requirement for their business.
14:36
SPEAKER_01: Absolutely.
14:37
SPEAKER_01: And a lot of people don't have 30% to put down.
14:40
SPEAKER_01: Some people don't even have 15, 10.
14:45
SPEAKER_01: But we can potentially still make that work.
14:47
SPEAKER_00: Yeah.
14:48
SPEAKER_00: Talk to us about the possibility of an individual or a business owner getting more than one SBA loan.
14:55
SPEAKER_00: So let's just say they they they they got one five years ago, their their buildings, and now they want another building.
15:00
SPEAKER_00: Can they can they go do that?
15:02
SPEAKER_01: You can have multiple SBA loans as long as it doesn't uh extend beyond the five million dollar cap.
15:09
SPEAKER_01: Okay.
15:09
SPEAKER_01: So you can have a one million here, a two million here, a two million there.
15:14
SPEAKER_01: Okay, you can have multiple loans, even for multiple things.
15:17
SPEAKER_01: You can buy a building, you can buy a business, you can buy inventory, all separate loans, as long as it's under that five million dollar threshold.
15:25
SPEAKER_00: Brandon, all that sounds great.
15:27
SPEAKER_00: Why don't we talk about business acquisitions?
15:29
SPEAKER_00: Sure.
15:30
SPEAKER_00: And just give us a scenario of in what situation would someone seek to do this?
15:36
SPEAKER_01: Sure.
15:38
SPEAKER_01: So you have a doctor, for example.
15:43
SPEAKER_01: They they're they're out of school, they're working for a private group, they want to split off, go on their own, buy a practice.
15:53
SPEAKER_01: A lot of banks do practice finance.
15:56
SPEAKER_01: Um, we do it as well, but this is just one example of how you can buy something where you don't have experience necessarily owning a business, and you can go out and buy someone else's business.
16:10
SPEAKER_01: So one of the really cool things that Live Oak does, which I can confidently say no one else is doing right now.
16:18
SPEAKER_01: So in the 7A world, the max loan is 5 million bucks.
16:22
SPEAKER_01: So there are some lenders who do business acquisition loans, but only up to 5 million.
16:27
SPEAKER_01: We'll actually go to nine.
16:29
SPEAKER_01: So we do an SBA loan for 5 million and a$4 million conventional in back of it.
16:35
SPEAKER_00: For for the business acquisition portion of it.
16:38
SPEAKER_01: So 99% of other lenders out there stop at$5 million.
16:44
SPEAKER_01: We play in the bigger space also up to nine.
16:47
SPEAKER_01: So that opens up a huge box for a lot of people because there's some great businesses out there for seven, eight, nine million, and normally it's either cash, private equity, as SBA's gone.
17:02
SPEAKER_00: Right.
17:03
SPEAKER_01: But with us, we can do this uh two-piece loan and get up to the larger prices.
17:08
SPEAKER_00: And the scenario you just gave us was uh business acquisition that included real estate, but I guess you could just do a business.
17:15
SPEAKER_01: So you can do a business by itself and still lease the real estate, yeah, or you can do uh a combination, business acquisition and real estate acquisition at the same time.
17:29
SPEAKER_01: And we can likely finance the whole thing still under SBA.
17:36
SPEAKER_00: Do you find that business owners are aware of these financing options or usually not?
17:41
SPEAKER_00: Okay.
17:42
SPEAKER_01: Um it's I mean SBA is huge.
17:44
SPEAKER_01: Every bank does it, but it's still surprising how many people really don't know what SBA does.
17:51
SPEAKER_01: So for those of you watching, you can buy a business, you can buy a building, you can get equipment, inventory, working capital, do partner buyouts.
18:01
SPEAKER_01: Let's say you want to build something from the ground up, we can finance that too.
18:06
SPEAKER_01: So you can say, I want to buy this piece of dirt, build a whatever size building for my manufacturing business.
18:14
SPEAKER_01: For let's say you're a trucking business.
18:18
SPEAKER_01: Um, you want to park a bunch of trucks on a piece of dirt.
18:22
SPEAKER_01: We can finance land if it's used by the business.
18:26
SPEAKER_00: All this sounds great.
18:27
SPEAKER_00: I just want to be clear because these are all great options.
18:30
SPEAKER_00: And I know a lot of our viewers are gonna be watching this and saying, I don't have a business yet, but I want to do this.
18:37
SPEAKER_00: Sure.
18:37
SPEAKER_00: And so go back to the beginning of the video where we said if you're in the medical field or doing a franchise, but in most cases, and I would assume buying land, doing the development for a manufacturer, like you're gonna have to be in the business, right?
18:50
SPEAKER_00: Like that's gonna have to be an existing business before Live Oak Bank takes a look at that.
18:54
SPEAKER_01: Yes, we don't want to necessarily do ground up construction loans for a startup company.
18:59
SPEAKER_01: But if you're existing, if you're profitable, you want to take your business to the next level, we can absolutely talk about it.
19:06
SPEAKER_00: Okay.
19:06
SPEAKER_00: Hey Brandon, so we just talked about uh SBA 7A?
19:09
SPEAKER_00: Correct.
19:10
SPEAKER_00: Let's talk about 504.
19:11
SPEAKER_00: Sure.
19:12
SPEAKER_00: And if you could just explain the difference, a lot of our viewers get confused.
19:16
SPEAKER_00: Heck, people in the real estate industry get confused.
19:18
SPEAKER_00: How does a business owner know?
19:20
SPEAKER_00: Am I 504?
19:22
SPEAKER_00: Am I 7A?
19:23
SPEAKER_00: Like which route, what determines which route I should go?
19:26
SPEAKER_01: So without going too far into the weeds, I'll give you kind of an overview.
19:31
SPEAKER_01: So most banks do one or the other, some banks do both.
19:36
SPEAKER_01: Many years ago, SBA created kind of its own internal competition because they had this what's called a 504 that really is only used to buy equipment or real estate.
19:48
SPEAKER_01: And then 20 years ago, say they rolled out this new product called 7A, which does everything.
19:55
SPEAKER_01: So some people know one product, some people know the other product.
20:00
SPEAKER_01: But 504 historically has been the big kind of 800-pound gorilla in the room that everyone knows 504 does real estate.
20:10
SPEAKER_00: So that one would be like the highest utilized for your traditional business product.
20:15
SPEAKER_01: Right.
20:15
SPEAKER_01: Yeah, most borrowers have heard about it, most real estate brokers know about the 504 product.
20:21
SPEAKER_01: Um, but just to give you a few kind of basic differences, so 504 goes up to well, Live Oak can do it up to about$20 million, whereas the 7A caps at 5 million.
20:36
SPEAKER_01: But we finance both, and when someone says, I want to buy a piece of real estate, what are my options?
20:43
SPEAKER_01: We'll actually sit down with them, explain both.
20:45
SPEAKER_01: See, here's the pros and cons of this, here's the pros and cons of that.
20:49
SPEAKER_01: And they're both good products, but they are different.
20:55
SPEAKER_01: So, for example, if you have a$10 million real estate or a piece of real estate, you can't use a 7A.
21:01
SPEAKER_01: It's too small.
21:02
SPEAKER_01: So you have to use a 504.
21:04
SPEAKER_01: Right.
21:06
SPEAKER_01: A couple of the kind of normal quirks that people see.
21:09
SPEAKER_01: So 504 is two loans, 7A is one loan.
21:13
SPEAKER_01: So 7A is just a loan with the bank, no SBA involvement.
21:17
SPEAKER_01: 504, you have a first with the bank and a second with what's called a CDC.
21:23
SPEAKER_01: They represent the SBA, and it's typically structured in a 50% first, a 40% second, and 10% down.
21:30
SPEAKER_00: Okay.
21:31
SPEAKER_01: So now the 504 cannot allow 100% financing, but the 78 does.
21:37
SPEAKER_00: But the 7.8 does, but there's a limit of the 5 million.
21:40
SPEAKER_01: Correct.
21:40
SPEAKER_01: So and they have different structures, different fee structures, different prepayment penalties.
21:46
SPEAKER_01: There's not one that's necessarily better than the other.
21:49
SPEAKER_01: They just do a lot of different things, both within the real estate world.
21:54
SPEAKER_00: With the five with the 504 limit being 20 million, does that mean that some a business Could get as many real estate loans and then cap out at 20.
22:05
SPEAKER_01: So you just touched on a very interesting topic.
22:07
SPEAKER_01: So let me just kind of back up for a second.
22:11
SPEAKER_01: So this$20 million figure that's sort of a live oak max.
22:17
SPEAKER_01: Technically, the CDC, who is doing the second loan, they cap out at$5 million.
22:23
SPEAKER_00: Okay.
22:24
SPEAKER_01: So some banks will just do a$10 million first because that's their cap.
22:30
SPEAKER_01: Some banks might do a$15 million first because that's their cap.
22:35
SPEAKER_01: So one of the cool things that the 504 does is they have this program called Green, or if you do a green incentive.
22:46
SPEAKER_01: What the green program allows you is to do multiple loans up to$5 million with that second piece.
22:54
SPEAKER_01: So what it means is if you have a building that is now it saves, I think, 20% on the cost of energy.
23:04
SPEAKER_01: If you make the building, uh say you add solar, say you add um LED lighting, you can actually redo this$5 million cap multiple times.
23:19
SPEAKER_00: Okay.
23:20
SPEAKER_01: So if you have one, say you have one$20 million building, you've got a$5 million second in place, normally you're capped out.
23:28
SPEAKER_01: You can't do any more SBA financing with this this new product.
23:33
SPEAKER_01: It's not new, but it's um not very well known.
23:38
SPEAKER_01: So what happens is the bank will order a report on the building.
23:43
SPEAKER_01: And if the report shows that you can save 20% of your cost for energy, whether it's through lighting or solar panels, then you can now redo this$5 million cap as much as you want.
23:58
SPEAKER_01: Again, again, again.
24:00
SPEAKER_01: So if you want to start hoarding real estate for your business, make them all efficient, and you can do that.
24:10
SPEAKER_00: Yeah, that sounds like a great, great program.
24:12
SPEAKER_00: So I understand that the bank, Live Oak Bank, also does work in capital.
24:17
SPEAKER_00: Can you can you touch on that?
24:19
SPEAKER_01: Sure.
24:20
SPEAKER_01: So the SBA has this product that allows for essentially smaller loans.
24:26
SPEAKER_01: So we typically do uh 50,000 to 500,000, and they're really just for working capital or similar types of operating expenses.
24:38
SPEAKER_00: And this is just for anyone to watch, I mean, this is if you're an operational business right now, and and you need you need funds for equipment or that type of stuff.
24:47
SPEAKER_01: Yeah, it can be for say you want to expand and you want to open up a second location, you don't own the real estate, but you need money for you know new rent and new staffing, and you want to do some marketing, or you want to refinance some of your business debt.
25:03
SPEAKER_01: All these things can be done with this what's called Express, it's the SBA product to do a working capital loan.
25:13
SPEAKER_01: And it can actually do a lot of things.
25:15
SPEAKER_01: It can do equipment, we can finance um inventory, you can finance operating costs.
25:23
SPEAKER_01: And you don't have to own the building in order to get this, as long as your business shows a reasonable bottom line, you can afford taking on some additional debt.
25:34
SPEAKER_01: We see that it's gonna help your business go to the next level.
25:37
SPEAKER_01: We can finance that.
25:39
SPEAKER_00: What does the debt look like for so far?
25:40
SPEAKER_00: Like someone's watching this and they're like, yeah, but at what cost, or what's the interest rate?
25:44
SPEAKER_00: Or I and I know it it's gonna vary, but more or less, like what's the range?
25:49
SPEAKER_01: Sure.
25:50
SPEAKER_01: So uh in the working capital space, rent are typically about two and a half over prime.
25:56
SPEAKER_00: Okay.
25:56
SPEAKER_01: Um in the real estate space, we're typically um about one to one and a half under prime.
26:04
SPEAKER_00: Brandon, so I know you're located here in Southern California, but Liboke Bank could do loans where?
26:11
SPEAKER_00: All 50 states.
26:12
SPEAKER_00: Okay, so anyone could reach out to you.
26:14
SPEAKER_00: And Puerto Rico.
26:16
SPEAKER_00: There you go.
26:17
SPEAKER_00: So if you're a business owner and you're looking for working capital, you're looking to expand, you're trying to do a partnership buyout, you're looking to buy real estate, maybe more real estate.
26:28
SPEAKER_00: When you're a business owner, you're an entrepreneur, and you're looking for ways to grow.
26:34
SPEAKER_00: And and today we learned, and thanks to Brandon, of all these other options that I hadn't really covered before on this show.
26:40
SPEAKER_00: So thank you for coming in today.
26:42
SPEAKER_00: What's the best way, Brandon, for someone to reach out to you?
26:45
SPEAKER_01: Sure.
26:45
SPEAKER_01: Um, you're welcome to call me on my cell.
26:48
SPEAKER_01: It's 949-751-8832.
26:53
SPEAKER_01: It's on my hip, so you can call me whenever.
26:56
SPEAKER_01: Um, I work from home, so I'm always nearby.
26:59
SPEAKER_01: Or you can shoot me an email at Brandon.sandler at liveoak.bank.
27:08
SPEAKER_01: Not dot com.bank.
27:11
SPEAKER_00: So there you have it.
27:11
SPEAKER_00: Thank you so much, folks, for tuning in.
27:13
SPEAKER_00: Make sure to like, comment, and subscribe.
27:15
SPEAKER_00: Until next time.