Live Oak Bank: Straight Answers to SBA loan

Live Oak Bank: Straight Answers to SBA loan -

Who's Live Oak Bank? I had never heard her name until I saw loan provider in the list of top SBA 7A. They are consistently one of the largest providers of SBA 7a loans both in terms of numbers of loans and $ amount of loans. In recent SBA report, it was ranked number 3 on the list of most active SBA 7a lender before both JP Morgan Chase and Citibank. (The top two were Wells Fargo and US Bank). According to their website, they specialize in lending to businesses such as dentists, veterinarians and pharmacies.

are wondering how to get an SBA loan? Click here to get our free guide:
apply as for an SBA loan

Our interview with David Lucht

I had a chance to interview David Lucht, the Bank's Chief Risk Officer and founding member of the Live Oak Bank. I loved it, its direct answers to my questions about search which banks from borrowers.

What are common misconceptions that small businesses have to borrow money from banks over?

Many small businesses fail to recognize banks risk tolerance. Banks must be correct, a borrower's ability to repay the rating of at least 98% of the time. If the risk of a project as it is higher, the funding needs should be filled by better equity.

Are there rules of thumb for the amount of money that a small business might be able to lend to?

The rules of thumb are very different from the industry. But at the end of the day a small business need have enough cash flow to repay the debt, and have a cushion. Most bank look for at least 1.25x debt service coverage ratio, a company means must, a 25% cash cushion to produce his debts paid.

Which two or three financial ratios is placed a heavy emphasis on by lenders?

What would be a "healthy" relationship? The debt service coverage ratio (1.25x +) Debt / Worth, (below 2.00x)

Can you describe the different phases of the credit application and perhaps give a sample timetable for how the process might take place ,?

Qualification: First information exchanged, to see if the possibility that the general parameters of the Bank fulfilled (1 week)

Proposal: Issued by qualified, moves when the customers accepted

Drawing to Drawing: Detailed analysis, much information exchanged that results in formal approval or acceptance (1-2 weeks)

Close: Driven by complexity Deal

[1945009?] What are common misconceptions that small businesses through SBA loans

loan program is too complicated. Not if the lender

Need full credit is experienced

to have. SBA is designed to be a cash flow program.

What are the major differences in the application process are saved for SBA and non-SBA loans?

No really, with the exception of a few forms. The financial analysis carried out is exactly the same.

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There are steps that you go through companies recommended before start the loan application process (as audited by a CPA books have)?

Instead audited statements, I would suggest that they really think about their business, and create a detailed forecast for the next year or two, what we call a "plan for success". Point out how the company apart from the competition. Demonstrate tangible strategies that have in profits and sales in the past produced growth, and talk about the future plans continue to be successful. Convince a bank that a well-run company.

What are the most common reasons a loan application for SBA and non-SBA loans for rejection?

lack of cash flow sufficient to pay the debt, horrible personal credit, declining trends without any explanation of how it can be reversed.

is specialize in certain regions or sectors of your bank?

[1945001Ja], we specialize in loans to veterinarians, dentists, doctors' offices, investment advisors, funeral homes, and family entertainment centers. We provide in all 50 states.

The types of enterprises towards your bank for a loan and why?

solid, well-run companies that have good money look should flow, but less than the full collateral coverage. We are a cash flow lenders.

See Current SBA loan interest

About David Lutch, Chief Risk Officer, Live Oak Bank

David Lucht is the Chief Risk Officer for the Live Oak Bank. Before joining Live Oak Bank in May 07 as a founding member, Lucht held numerous senior positions in many successful banks. He was the Chief Credit Officer, Executive Vice President and Director of First Merit Bank out of Akron Ohio, where he was responsible for leading the turn in the credit culture and performance of $ 10500000000 Bank.

are wondering how to get an SBA loan? Click here to get our free guide:
As for a SBA loan request

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