Cash-out refinancing is a great way for homeowners, including first home buyers, to access the equity they’ve built up in their homes. This process involves getting a new mortgage that’s larger than your current one, and the difference is given to you in cash. This extra cash can be used for buying another property, paying off debt, or making home improvements. In this blog, we’ll explore the ins and outs of cash-out refinancing and answer common questions.

What is Cash-Out Refinancing?

Cash-out refinancing means replacing your existing mortgage with a new one that’s larger. The extra amount you borrow is given to you in cash, which you can use for various needs like home renovations, paying off high-interest debt, funding education, or investing.

For example, if your home is worth $800,000 and you owe $400,000 on your mortgage, you might refinance for $500,000. You’d pay off the $400,000 loan and get $100,000 in cash.

How Does Cash-Out Refinancing Work?

Here’s how cash-out refinancing generally works:

1. Assessing Home Equity: Calculate your home equity by subtracting what you owe on your mortgage from your home’s market value. Lenders typically allow you to borrow up to 80% of your home’s value, but this can vary.

2. Applying for the Loan: Contact your current lender or shop around for the best refinancing deal. You’ll need to provide documents like proof of income, credit history, and details about your current mortgage.

3. Home Appraisal: The lender will appraise your home to determine its current market value.

4. Approval and Terms: If approved, you’ll receive the terms of the new loan, including the interest rate, repayment period, and any fees.

5. Settlement: The new loan pays off your existing mortgage, and you get the difference between the old and new loan amounts as cash.

Pros and Cons of Cash-Out Refinancing

Pros:

• Secure better loan terms and interest rates.
• Use the cash to pay off high-interest credit cards and personal loans.
• Lower your monthly payments by extending the loan term.

Cons:

• Risk of arrears if you can’t make the repayments.
• Longer loan term means paying more interest over time.
• High closing costs for the new mortgage, though lower monthly payments might offset this if you stay in your home long-term.
• Using cash-out refinance for debt consolidation might extend your loan term more than necessary.

Considerations and Risks

• Costs and Fees: Refinancing can be costly, with expenses like application fees, valuation fees, legal fees, and sometimes break fees for ending your original mortgage early.
• Longer Repayment Period: While lower monthly payments are possible, extending your mortgage term means paying more interest over the loan’s life.
• Impact on Equity: Taking cash out reduces your home equity, affecting your financial stability and future options, especially if property values drop.
• Risk of Arrears: If you can’t meet the repayment terms, you risk arrears, putting your home in jeopardy.
• Qualification Requirements: Lenders will check your creditworthiness, income, and home value. Poor credit or insufficient income could lead to less favorable loan terms or even rejection.

How Much Can You Borrow with a Cash-Out Refinance?

The amount you can borrow depends on several factors: the current market value of your property, the loan-to-value ratio (LVR) allowed by the lender, and your creditworthiness.

Lenders typically allow a maximum LVR between 80% and 90% of your property’s appraised value. To find out how much you can borrow, calculate the difference between what you owe and 80% of your property’s value.

For example, if your property is appraised at $500,000 and your current mortgage balance is $300,000, a lender allowing an 80% LVR might let you cash out up to $100,000.

Check with lenders for their specific terms and guidelines, as these can vary. They might also have restrictions on how you can use the cash-out funds and require documentation or proof of intended use.

To get an exact amount you’re eligible to borrow, consult with mortgage brokers or lenders. They can assess your situation and give you accurate information based on their criteria.

Benefits of Cash-Out Refinancing

Cash-out refinancing can be a smart financial move, allowing you to tap into your home’s equity. Here are some reasons why it’s popular:

• Access to Funds: You get a lump sum of money based on your home’s equity. This can finance projects like home improvements, starting a business, investing, education costs, or paying off high-interest debt.
• Competitive Interest Rates: Refinancing often means securing a better interest rate on your loan. Shop around with different lenders to find the best rates and loan terms.
• Potential Tax Benefits: Depending on how you use the funds, the interest on the portion of the loan used for investments might be tax-deductible. Consult a tax advisor to understand your specific situation.

Conclusion

Cash-out refinancing is a valuable option for homeowners, including first home buyer, to access their property’s value for various financial purposes. Whether you want to invest in another property, consolidate debt, or cover major expenses, it’s essential to understand how cash-out refinancing works and its impact.

Ready to Cash-Out Refinance? Seek advice from financial experts to ensure your decisions align with your long-term financial plans. For more information, read our related articles.. Book a consultation call at 1300 GET LOAN today and make the right financial decisions!

FAQs

1. How much can I cash out when I refinance? Typically, lenders limit cash-out refinance amounts to 80% of your home’s value. For example, if your home is valued at $250,000 and your mortgage balance is $150,000, you could cash out up to $50,000.

2. Can I cash out a refinance to buy another property? Yes, you can use the funds from a cash-out refinance to purchase another property. This strategy is often employed by investors looking to expand their real estate portfolio or by homeowners wishing to buy a second home.

3. Can I refinance and get cash out? Absolutely. The primary feature of a cash-out refinance is that it allows you to refinance your existing mortgage and access a portion of your home equity as cash. You can use this cash for various purposes, such as home improvements, education expenses, or debt consolidation.

4. Is a cash-out refinance taxable? The cash received from a cash-out refinance is not considered taxable income. However, if you invest the funds and generate additional income, such as rental income from a new property, that income may be taxable. Consult a tax professional to understand the implications specific to your situation.

5. How to calculate cash-out refinance? Calculating a cash-out refinance involves determining the amount of equity you can tap into. Typically, lenders allow you to borrow up to 80% of your home’s appraised value. Subtract your existing mortgage balance from this amount to find out how much cash you can potentially receive. For example:

   • Appraised home value: $800,000
   • Maximum allowable loan (80%): $640,000
   • Current mortgage balance: $400,000
   • Potential cash-out amount: $240,000 (before closing costs and fees)

6. Can I cash-out refinance my rental property? Yes, in Australia, you can cash-out refinance your rental property. Lenders typically allow refinancing for investment properties, but terms may vary.

7. Can you cash-out refinance a car? No, cash-out refinancing is usually for real estate properties, not vehicles in Australia.

8. Is a home appraisal required? Yes, in most cases, an appraisal determines your home’s market value, crucial for determining how much cash-out you can receive in refinancing.

9. Does a cash-out refinance change your interest rate? Yes, a cash-out refinance can change your interest rate. It might secure a new rate that’s more competitive or less favorable depending on market conditions and your financial situation.

10. Does cash-out refinance affect credit score? Yes, applying for a cash-out refinance can temporarily affect your credit score due to the credit inquiry and new loan account. Responsible management can positively impact your credit over time.

11. Does cash-out refinance increase mortgage payments? Yes, cash-out refinancing could increase your mortgage payment if you borrow more or extend your loan term. Consider the impact on your monthly budget.

12. How long does a refinance cash-out take? Similar to a regular refinance, the timeframe for a cash-out refinance varies but generally involves a process that can take weeks from application to settlement.

13. Cash-out refinance vs. home equity loan: What’s the difference? Both allow accessing equity but differ in process. Cash-out refinancing replaces your original mortgage with a new one, while a home equity loan adds a new loan without changing your original mortgage.

Have many potential homebuyers with little to no money. What type of buyer would qualify for USDA loans. I am used to FHA loans mainly. Thank you in advance.

Per U.S. District Court, bankruptcy filings in the United States is up 13% and surging higher. Inflation, high rates, and cost of goods and services are leading cause of unemployment and financial crisis among Americans.

https://www.uscourts.gov/news/2023/10/26/bankruptcy-filings-rise-13-percent

Sing and dance like no one is watching,

Text and email like it will be read in court.

Like a scene from “Night of the Living Dead,” they will come into your home and take over. Zombies are everywhere; just when you thought it was safe, the zombies appear. Think about getting a pool; the zombies will take it. Renovation’s a great idea, but the zombies will come.

Zombie mortgage, or at least the term, was coined in 2008 after the crash of banks and the real estate business. What exactly is a zombie mortgage? It is a secondary mortgage when purchasing a house. Jack and Jill can’t afford the 20% payment, so they borrowed from their aunt in Peoria to secure the house. The bank has a 30-year mortgage on the home, and they need good reason to foreclose. The owners are paying the first mortgage, not the second; they have their own arrangement. However, the secondary holders of the mortgage can foreclose whenever they want. Scary, “Night of the Living Dead,” scary.

Usually, it is assumed that the secondary mortgage is forgiven in six to ten years, and the loan lies dormant for years, basically forgotten about. Surprise, that isn’t always the case.

Jack and Jill are getting divorced; Aunt Hazel from Peoria is Jill’s aunt. What could happen if the aunt calls the note in? It’s a really messy divorce; Jack cheated on Jill, and Jill wants revenge. The aunt sends Jack a foreclosure notice. Meanwhile, Jack has to pay and vacate the home.

Jill, being Aunt Hazel’s favorite niece, assumes ownership. This is a real-life scenario.

In the last two years, ten thousand zombie mortgages were called in for payment in New York. This is happening every day during the week.

In the event of a zombie attack, remember that they aren’t that smart but awfully strong. Make barricades against all doors. Don’t open windows and get to high ground; they can’t climb.

The CDC wants you to be prepared. They have a practical handbook available. Your guide to the “apocalypse.” Similar to hurricane preparation.

Stock up on water, wine, and garlic.

Anthony Spilotro also known as Tony Spilotro was a ruthless Chicago Mobster. He rose up the ranks of the Chicago Mob Family

https://youtu.be/eD3qYR6aa18?si=aiqVaKsduMRCkZcf

My Branch Manager wants me to sign a employment and compensation agreement between me and my mortgage company. Do I need to get a lawyer to review the employment and compensation agreement as well as a team agreement or should I just sign it. My Branch Manager said not to worry about it and just sign it. My manager said that I am too small for my employer to come after me. What do I need to look out for and anything I should focus on? My last Lender said I could not bring my loan officer assistant and processor and if I do I will go to jail and regret it. I did not bring anyone in fear I get sued.

Is it true banks and credit unions have halted granting credit cards, car loans, business loans, consumer loans, mortgage loans, and any type of financing to mortgage loan officers, mortgage brokers, real estate agents, realtor brokers, independent 1099 property management wage earners, contract mortgage processors, appraisers, 1099 wages earners and any independent contractors in the mortgage and real estate industry?

• This discussion was modified 1 year, 5 months ago by  Sapna Sharma.

I accidentally shallowed some Scrabble tiles, and now I’m experiencing constant vowel movement. The next trip to the bathroom could spell disaster.

No-doc real estate loans, short for “no documentation” or “no document” loans, were a type of mortgage loan that gained popularity in the early 2000s during the housing boom in the United States. These loans were designed to make it easier for borrowers to obtain mortgages without having to provide extensive documentation of their income, employment, or financial assets. The key characteristic of no-doc loans was that they required minimal or no documentation from the borrower to verify their financial status.

Here are some key features of no-doc real estate loans:

1. Limited Documentation: Borrowers typically did not need to provide traditional income verification documents, such as pay stubs, tax returns, or W-2 forms. Instead, they might state their income on the loan application without providing any supporting evidence.

2. Higher Interest Rates: Due to the increased risk associated with lending without thorough income verification, no-doc loans often came with higher interest rates compared to traditional mortgage loans.

3. Lower Down Payments: Lenders might accept smaller down payments, allowing borrowers to purchase homes with less money upfront.

4. Risky Borrowers: No-doc loans were often marketed to self-employed individuals or those with irregular income streams who had difficulty qualifying for conventional mortgages.

5. Adjustable-Rate Mortgages (ARMs): Many no-doc loans were structured as adjustable-rate mortgages, which meant that the interest rate could change over time, potentially leading to higher monthly payments.

6. Declining Values: The popularity of no-doc loans contributed to the housing bubble and subsequent financial crisis in the late 2000s, as many borrowers who couldn’t afford the loans defaulted when interest rates adjusted or home values declined.

As a result of the housing market collapse and the financial crisis, regulations surrounding mortgage lending were tightened, and risky loan products like no-doc loans largely disappeared from the market. Today, lenders typically require borrowers to provide comprehensive documentation to verify their income and financial stability when applying for a mortgage, with the aim of ensuring that borrowers can afford the loans they are seeking.

Heard there are beautiful places in Alabama.  Just spoke with Ronda Butts and she was telling me about Birmingham Alabama.  You get a lot of house for the money. Ronda just wrote a detailed article about high end homes in Alabama

I just wanted to share with everyone how important it is to have an amazing friend. Today, my friend’s house caught on fire and she immediately called me in a panic. Even though I had no idea where her house was, I reassured her that I was on my way. In the midst of assisting her with a loan, I quickly pulled up her address and rushed to the scene.

Seeing the devastation firsthand was heartbreaking. The fire had destroyed precious family photos and heirlooms, including a table that belonged to her great grandmother. As the firefighters worked to extinguish the flames, my friend realized she needed to contact her insurance company, but she couldn’t remember the name or details. Thankfully, I had all the information she had previouslyu emailed me, so I assured her that I would take care of it.

What struck me the most about this experience was how everything fell into place. It felt like a divine intervention, with all the necessary information coming together within a matter of minutes. I am incredibly grateful that my friend and her family were not home at the time of the fire, as they might have risked their lives trying to save their belongings. Unfortunately, the house was a total loss.

It was definitely an eventful day, but it reminded me of the importance of having a supportive friend in times of crisis. We never know when we might need someone to lean on, and I am grateful that I could be there for my friend when she needed it the most. As I reminded her , she was there for me . When my Dad passed , help cleaning out the attic.

The Globalists and Democrats are on the same crazy mission of depopulation and ending innocent lives early.

The coronavirus pandemic was a man made weapon of mass destruction and the coronavirus vaccine was created to depopulate the world. Boosters came out to continue killing people. The Globalist hate humanity, hate the United States, amd the US Constitution. The Globalist are evil and examples of Globalist include the following, Barack Obama, Michael Robinson Obama, George Soros, Dementia Lying Biden, The Rothschild, Bill Gates, Nancy Pelosi, Gavin Newsom, JB Pritzker, Claus Schaub, Anthony Fauci. These statements are based on Facts and No BS.

How Does The ITIN Loan Program Work

The ITIN (Individual Taxpayer Identification Number) loan program is designed to provide financial assistance to individuals who do not have a Social Security Number (SSN) but have an ITIN. ITINs are issued by the Internal Revenue Service (IRS) to individuals who are required to pay taxes in the United States but are not eligible for an SSN, such as non-resident immigrants, foreign nationals, and others.

Here’s how the ITIN loan program typically works:

1. Eligibility: To qualify for an ITIN loan, you need to have a valid ITIN issued by the IRS. Most lenders that offer ITIN loans require applicants to be at least 18 years old and have a source of income in the United States.

2. Choose a Lender: You’ll need to find a lender that offers ITIN loans. These lenders specialize in serving individuals with ITINs and understand the unique requirements of this demographic. Some banks, credit unions, and online lenders offer ITIN loan programs.

3. Application Process: The application process for an ITIN loan is similar to that of a traditional loan. You’ll need to provide personal and financial information, including proof of identity, income documentation, and other relevant paperwork. Lenders will assess your creditworthiness based on this information.

4. Loan Types: ITIN loan programs may offer various types of loans, including personal loans, auto loans, mortgages, and more. The availability of loan types can vary depending on the lender.

5. Credit Check: Some lenders may perform a credit check as part of the application process to evaluate your credit history and assess the risk associated with lending to you. However, some ITIN loan programs are designed for individuals with limited or no credit history.

6. Loan Approval: If your application is approved, the lender will provide you with the terms and conditions of the loan, including the interest rate, loan amount, repayment schedule, and any applicable fees.

7. Repayment: Once you accept the loan offer, you are responsible for repaying the loan according to the agreed-upon terms. This typically involves making regular monthly payments, which may include both principal and interest.

8. Building Credit: Timely repayment of an ITIN loan can help you build a positive credit history in the United States, which may improve your access to financial products and services in the future.

It’s important to note that the terms and requirements for ITIN loans can vary from one lender to another, so it’s essential to shop around and compare offers to find the best fit for your needs. Additionally, borrowers should be aware of the interest rates and fees associated with ITIN loans, as they can vary depending on the lender and the borrower’s creditworthiness.

Before applying for an ITIN loan, it’s advisable to seek guidance from a financial advisor or counselor to understand the terms, costs, and potential risks associated with the loan.

Obtaining business credit as a non-resident can be challenging, but it’s not impossible. Here are some steps you can take to establish and build business credit in a country where you are not a resident:

1. Establish a Legal Business Entity:
   • Register your business as a legal entity in the country where you want to establish credit. Common options include forming a corporation, limited liability company (LLC), or another suitable business structure.
2. Obtain an EIN or Local Business Identification Number:
   • In the United States, you’ll need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Other countries may have similar tax identification numbers.
3. Open a Business Bank Account:
   • Open a business bank account in the country where your business is registered. This account should be separate from your personal finances.
4. Build a Strong Business Credit Profile:
   • Start by establishing relationships with local suppliers, vendors, and creditors. Pay your bills on time to create a positive credit history.
   • Consider applying for a business credit card with a local bank or financial institution. Use it responsibly and pay off balances on time to build credit.
5. Monitor Your Credit Profile:
   • Regularly check your business credit report to ensure accuracy and track your credit history. In the United States, business credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business provide credit reports for businesses.
6. Establish Trade References:
   • Work with suppliers, vendors, and other business partners who are willing to report your payment history to credit bureaus. Positive trade references can boost your credit profile.
7. Apply for Small Business Loans or Lines of Credit:
   • After establishing some credit history, consider applying for small business loans or lines of credit from local financial institutions. Secured loans may be easier to obtain if you can provide collateral.
8. Build a Strong Financial Record:
   • Maintain accurate financial records for your business. This includes keeping well-organized accounting books, tax records, and financial statements.
9. Show Stability:
   • Demonstrate that your business is stable and has a reliable source of income. Lenders and creditors are more likely to extend credit to businesses with a strong financial track record.
10. Seek professional advice.
    • Consult with local financial advisors or legal experts who can provide guidance on building business credit in your specific location.

Keep in mind that the process of building business credit as a non-resident may vary depending on the country and local regulations. It’s essential to understand the specific requirements and credit reporting agencies in your target country. Additionally, building business credit takes time, so be patient and persistent in your efforts. GCA Forums are experts in helping non-residents with business credit.

I remember years ago the commercial,” I’ve fallen and I can’t get up.” I always laughed at the commercial. Now, I’m 70 I don’t find this funny anymore.

I never knew any of my grandparents, but I was fortunate enough to know my great-uncle, who was my grandfather’s brother. My grandfather, Alfonso, arrived with his brother Francesco in New York around 1900. The brothers were born in Cava de’ Tirrini, a city in the Campagna region of southern Italy. The brothers didn’t take to American life; one example would be never really learning English.

My grandfather Alfonso died soon after the Depression, and his brother Francesco became my surrogate grandpa. Zio “Cheech,” as we called him along with Grandpa. He lived in Corona, New York, lived to be 86, and died in 1964, when I was ten. My memories are fading with age. However, I do vividly recall his basement in Corona. The walls were decked with the Sunday comics from The Daily News, “Terry and the Pirates, and “Gasoline Alley.” The old guy never understood the text of the comics; he loved the colors, and they were everywhere.

He had a modest garden of tomatoes, herbs, peaches and grape vines. He also made his own wine. One memory I will always remember was his smell; he smoked DiNapli cigars, short smokes we called “Guinea Stinkers,” and he wore the same old, grey sweater.

My parents would visit every Sunday for dinner in Corona. As soon as we arrived, he took me down to the cellar. I was the youngest and clearly his favorite. He showed me the latest edition of Sunday comics, and he always smiled. Then he’d sit me down and pour me some home-made wine. I was eight back then. He would slice a piece of peach and put it in our wine glasses. The wine was so strong in alcohol that it had to be cut with the sweetness of the peach. The “Godfather” scene at the end depicts Cheech in a tee, peach, and gray sweater.

He would serve wine in Flintstone jelly jars. I had a serious crush on Wilma until I was twelve.

What I would give for one more visit down his cellar, drinking wine and smelling those nasty cigars.

I can across a company called “United Wholesale Mortgage.” Has anyone heard of them?

https://www.youtube.com/watch?v=CyS65ltez9M

Two women talking: “How did you meet your husband?” The other woman replies, “When I was working in the pharmacy, he came and asked for condoms, size XXXXXX. I didn’t realize until we were married that he stuttered.”

• This discussion was modified 9 months, 1 week ago by  Gustan Cho.

https://www.youtube.com/watch?v=DKc3j8GMqGo

Another message from the one and only, Kevin DeLory. Thank you Kevin, for sharing

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Is the bird flu really here, or is it COVID-19 in disguise? The strain is HSN1, another flu strain, and each year they are getting worse, or are they really? In 2013, 900 people contracted the bird flu, and more than half died. Is this enough to be a pandemic?

Farmer workers and ranchers are at the highest risk of coming down with HSN1. I was unable to find where the 900 people got sick. I’m almost certain they worked on farms and ranches that lacked regular monitoring. Mostly found in meat and dairy, bird flu arrives and, voila, the price of eggs goes up, which has happened in the past few years.

I was amazed at the death statistics for flu deaths during COVID; there weren’t as many as previous years. I think all the flu stats were compiled together with COVID to make COVID worse. Thousands of people die of the flu each year, but not during COVID years. It was once called Trump’s flu.

With the election this November what will this flu be called, will CDC call it a pandemic? Or will it be a political stratagem? Biden Bird Flu, Biden Goodbye Flu, Trump’s Flu II. Both parties will cause chaos and come to the rescue, too bad the public will suffer.

It’s time to stock up on toilet paper and common sense.

What is the difference between mortgag bankers, correspondent lenders, mini-correspondent lenders, mortgage brokers, retail loan officers, and wholesale mortgage lenders?

When using child support as income, which of the following is required to verify the income for an FHA loan?

Gov. Ron DiSantis just passed a law in Florida, forbidding the release of balloons. The balloons are a danger to the wildlife along the beaches. So, if you have a beach party and lease balloons to celebrate you may be arrested or fineD. However, people under 6 years old are exempt from this law. What do the police do when a child’s age is questionable? “Hey pal pull over and show me your ID.”

7(a) loans

SBA’s most common loan program, which includes financial help for businesses with special requirements.

Content

1. What is a 7(a) loan?
2. Am I eligible?
3. How do I use the 7(a) loan?
4. What do I need to apply?
5. How do I pay back my 7(a) loan?
6. Existing borrowers

What is a 7(a) loan?

The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is a good option when real estate is part of a business purchase, but it can also be used for:

• Short- and long-term working capital
• Refinancing current business debt
• Purchasing and installation of machinery and equipment
• Purchasing furniture, fixtures, and supplies

The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.

Am I eligible?

To be eligible for 7(a) loan assistance, businesses must:

• Operate for profit
• Be considered a small business, as defined by SBA
• Be engaged in, or propose to do business in, the United States or its possessions
• Be able to demonstrate a need for a loan
• Use the funds for a sound business purpose
• Not be delinquent on any existing debt obligations to the U.S. government
• Be creditworthy and reasonably assure repayment of the loan

Some businesses may not qualify for a 7(a) loan. Read more about Terms, conditions, and eligibility.

How do I use the 7(a) loan?

Basic uses for the 7(a) loan include:

• Long- and short-term working capital
• Revolving funds based on the value of existing inventory and receivables
• The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
• The purchase of real estate, including land and buildings
• The construction a new building or renovation an existing building
• Establishing a new business or assisting in the acquisition, operation or expansion of an existing business
• Refinancing existing business debt, under certain conditions

What do I need to apply?

The contents of the loan application generally vary depending on the size of the loan and the lender’s processing method. When you’re ready to apply, begin the process by working with your lender to determine which documents they will require you to provide.

The loan application documents required will generally include SBA Form 1919, Borrower’s Information Form. Use the following checklist to ensure you are prepared if your lender asks you for any of the following information:

• Borrower information form (required): Complete SBA Form 1919 and submit it to an SBA-participating lender.
• Financial statements (as applicable): The lender may require personal financial statements for the applicant(s) or owner(s) of the applicant.
• Business financial statements (as applicable): Submit the following to help show your ability to repay a loan:
  • Profit and loss statement – Current within 180 days of your application. Also include supplementary schedules from the last three fiscal years.
  • Projected financial statements – Include a detailed, one-year projection of income and finances and explain how you expect to achieve this projection.
• Ownership and affiliations: Provide a list of names and addresses of any subsidiaries and affiliates.
• Business license or certificate (as applicable): Provide a copy of the original business license or certificate of doing business. If your small business is a corporation, stamp your corporate seal on the SBA loan application form.
• Loan application history (as applicable): Include records of any loans you may have applied for in the past.
• Income tax returns (required for the lender to verify applicant’s size): Include signed business federal income tax returns of your business for the previous three years.
• Resumes (as applicable): Include personal resumes for each principal.
• Business overview and history (as applicable): Provide a history of the business and its challenges. Include an explanation of why you need the SBA loan and how it will help your business.
• Business lease (as applicable): Include a copy of your business lease, or a note from your landlord, with the terms of the proposed lease.

If you are buying an existing business, gather the following information (required):

• Current balance sheet and profit and loss statement of the business being acquired
• Federal income tax returns for the previous three years of the business being acquired
• Proposed bill of sale/purchase agreement, including the terms of sale
• Asking price with schedule of inventory, machinery and equipment, and furniture and fixtures

You may be required to submit more SBA forms based on the specific use of proceeds or fees paid on a loans package or to a broker or agent.

How do I pay back my 7(a) loan?

Loan repayment terms vary according to several factors.

• Most 7(a) term loans are repaid with monthly payments of principal and interest from the cash flow of the business
• Payments stay the same for fixed-rate loans because the interest rate is constant
• For variable rate loans, the lender may require a different payment amount when the interest rate changes

sba.gov

7(a) loans | U.S. Small Business Administration

7(a) loans | U.S. Small Business Administration