SBA Today

In this episode, Paul and Tonya tackle a critical question that's causing confusion in the SBA lending world: Is a seller note allowed to have a shorter maturity than the SBA loan? While old rules considered this preferential treatment, the current SOP is silent, leaving many to wonder about the "spirit of the program". We dive into why this can be a painful mistake and how to avoid it.

We also cover:

• A New SBA Inspector General: The Small Business Committee has interviewed William Kirk, the new nominee to replace Mike Ware . He doesn't have much SBA experience but is expected to learn quickly .

• The Seller Note Secret: We're diving into a question from a viewer that could change how you structure deals. Is it okay for a seller note to have a shorter maturity than the SBA loan? We're digging into the spirit of the program and why, if the deal cash flows, it should be a non-issue.".

• Borrower Expectations: We talk about how to manage a borrower's expectations and the challenges of deals that have been in the pipeline for months.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer.

In this episode, Paul and Tonya dive into the major news from the U.S. Small Business Administration (SBA): the launch of the new MARC Loan Program. This is the first-ever dedicated loan program for small manufacturers and is designed to provide flexible working capital with "minimal red tape". Loan funds can be used for inventory, new projects, and other short-term needs.

• 💰The MARC Loan Program: The SBA's new loan program for small manufacturers offers working capital with maximum flexibility. It can be structured as a revolving line of credit or a term loan to support short-term needs.
• 🚧The Risk of Construction: Special guest Christa Hansen of Hansen Monitoring Team joins the show to tackle the risky side of construction loans. She reveals the common reasons deals get turned down, including low excess cash, inexperienced contractors, and "guesstimate" estimates.
• 🚨How to Avoid Disaster: Learn what banks and borrowers can do to minimize risk, the importance of a detailed project plan, and how to avoid costly mistakes.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Welcome to SBA Today, presented by Res Title, your SBA Title Experts for the week of September 1st. Paul Long and Tonya Mazurek are back together to discuss the latest news and trends affecting the SBA world.

In this episode, you'll hear about:

• New Fees and Fee Waivers for Manufacturers: New fee waivers for manufacturers in NAICS Sectors 31-33. For 7(a) loans of $950,000 or less, the upfront fee will be 0%. For 504 loans to manufacturers, both the upfront guaranty fee and the annual service fee will also be 0%.

• The "Debanking" Executive Order: A new Fair Banking Executive Order requiring every bank and credit union to respond to questions about whether they have rejected any person based on political or religious beliefs and to invite them back for business.

• Market Slowdown and New Rules: BizBuySell Q2 Insight Report shows that dealmaking is slowing amid tighter SBA lending and stricter underwriting.

• Buyer Awareness: Paul and Tonya discuss the report's finding that while 68% of buyers are considering an SBA loan, more than half (55%) are unaware of recent changes. They debate the meaning of "pre-qualified" in the context of SBA loans, with Tonya arguing that it's our job as lenders to know the rules, not the buyer's.

Tune in live every Tuesday morning on LinkedIn and YouTube. You can also catch our family of podcasts: the BDO Show and Art of SBA Lending.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Welcome to SBA Today, presented by Res Title, your SBA Title Experts for the week of September 1st. Paul Long and Tonya Mazurek are back together to discuss the latest news and trends affecting the SBA world.

In this episode, you'll hear about:

• New Fees and Fee Waivers for Manufacturers: New fee waivers for manufacturers in NAICS Sectors 31-33. For 7(a) loans of $950,000 or less, the upfront fee will be 0%. For 504 loans to manufacturers, both the upfront guaranty fee and the annual service fee will also be 0%.

• The "Debanking" Executive Order: A new Fair Banking Executive Order requiring every bank and credit union to respond to questions about whether they have rejected any person based on political or religious beliefs and to invite them back for business.

• Market Slowdown and New Rules: BizBuySell Q2 Insight Report shows that dealmaking is slowing amid tighter SBA lending and stricter underwriting.

• Buyer Awareness: Paul and Tonya discuss the report's finding that while 68% of buyers are considering an SBA loan, more than half (55%) are unaware of recent changes. They debate the meaning of "pre-qualified" in the context of SBA loans, with Tonya arguing that it's our job as lenders to know the rules, not the buyer's.

Tune in live every Tuesday morning on LinkedIn and YouTube. You can also catch our family of podcasts: the BDO Show and Art of SBA Lending.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Welcome to SBA Today, presented by Res Title, your SBA Title Experts for the week of August 25th!

Paul Long is back from his vacation and is joined by the "SBA Godfather" himself, Lance Sexton. In this packed episode, Paul and Lance discuss major news and trends affecting SBA lenders, brokers, and borrowers.

Key Headlines & Industry Insights:

• Major SBA Personnel Change: Ginger Allen is no longer with the SBA as of last Friday. Lance notes this is a "huge blow to the SBA industry" due to her extensive experience.
• Bank Merger: Towne Bank and Dogwood State Bank are merging. Although they call it a "merger of equals," it appears Towne Bank is the acquirer. Lance points out that with change comes opportunity, especially for other SBA lenders who can acquire portfolios or serve borrowers left in the gap.
• Small Business Week: The hosts remind listeners to get their nominations in for National Small Business Week. It's a great opportunity to get recognition for a borrower and for the lender.
• Legislative Focus: Paul shares how he uses the agendas of the House and Senate small business committees as a tool to see what topics the SBA is focusing on for future changes. Upcoming hearings include "Pathway to Capital: The Role of SBA Lending in Supporting Main Street America" and "Wired for Growth: How Expanding Broadband Can Revitalize Rural Small Businesses".
• Q2 BizBuySell Insight Report: Business acquisition transactions fell 4% year-over-year. Lance and Paul discuss how tighter SBA lending and stricter underwriting are slowing deal-making. Forty-one percent of business brokers surveyed reported delays from new SBA policies, and the average time on market increased by 12 days year-over-year. Despite this, 55% of buyers are unaware of the recent changes.
• Manufacturing Sector Decline: The manufacturing sector saw a 28% drop in transactions year-over-year. This decline is largely attributed to tariffs and trade tensions. Paul and Lance emphasize the importance of SBA lenders being "in the game" rather than just dabbling. They also highlight that if a business outgrows the SBA program, it means the program has accomplished its purpose.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Tonya Mazurek is back and joined by a very special guest, Stephanie Dunn, Executive Vice President and Chief SBA Revenue Officer at Community Bank & Trust. They'll dive into Tonya's recent career move and discuss the critical, and often overlooked, reasons why SBA loan deals get rejected.

In this episode, you'll learn about:

• Debanking Debate: President Trump's new Executive Order, "Guaranteeing Fair Banking for All Americans," targets "debanking" practices based on political, religious, or industry affiliation. This could lead to increased scrutiny for banks and potential requirements to reinstate previously denied clients.

• SBA News Headlines: The SBA has disbursed over $1.5 million to Texas flood victims and approved more than $10.1 million in relief for Kentucky. The SBA Franchise Directory has been reinstated and streamlined, allowing franchisors to sign one master certification. The SBA is also considering raising the 7(a) loan limit, possibly to $7.5 million or even $10 million for industrial businesses.

• Why Deals Fail: A Deep Dive with Stephanie Dunn

• Cash Flow: The top reason for rejection is an existing business's inability to show strong cash flow, which is crucial for repayment ability. Stephanie and Tonya discuss the difference between historical performance and overly optimistic projections, with Stephanie sharing that only about half of businesses actually meet their projections a year later.

• Lack of Experience: Beyond a borrower's own skills, lenders look at the strength of the team around them. A borrower with questionable experience can succeed with a knowledgeable team, and a new manager must understand how to work with an inherited team before making changes.

• Poor Credit & Money Management: It's not just about the credit score. Lenders dig into payment history, judgments, tax liens, and child support, as these reflect poor money management. Tonya and Stephanie both advise borrowers to know what's on their credit report before applying to avoid surprises.

• Construction Projects: The hosts discuss the risks of construction projects with low excess cash, inexperienced contractors, or "guesstimate" estimates. They stress the importance of having a contingency plan, an experienced General Contractor (GC), and understanding that delays are common.

• The "Human Factor": A deal can fail because of bad loan officers who "speak too soon," brokers who "spin a deal," or inexperienced bank teams. Stephanie emphasizes that borrowers should vet their lenders by researching their experience in a specific niche. Tonya adds that a good lender should be comfortable saying "I don't know" and will find the right person to help.

Don't miss a beat! This episode is live on LinkedIn and YouTube. You can also catch our family of podcasts: "The Art of SBA Lending" and "The BDO Show." Follow Tonya and Stephanie on LinkedIn for more insights.

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Welcome to a special solo episode of SBA Today, presented by Res Title, your SBA Title Experts! Join Tonya Mazurek as she takes the reins while Paul Long is on vacation.

In this packed episode, Tonya dives into:

• Meet William Briggs: Newly sworn-in Deputy Administrator, bringing "stricter underwriting, cleaner processes, and fewer curveballs." Expect "the return of receipts"!
• SBA Connect Call Takes! 📞 "Bye-Bye Vibes-Based Lending" (SOP 50 10 8) , MARC Pilot for manufacturers , fees returning Oct 1, 2024 , Community Advantage under the microscope , and the "Silent Tsunami" of CFPB 1071 Compliance data collection deadlines!
• SBA Faith & Funding Update: 🙏 Faith-based orgs now eligible for disaster loans (EIDL, physical disaster), but NOT 7(a) loans based on this update.
• SBA x DOL = Made in the USA Boost! 🇺🇸 New MOU to strengthen domestic manufacturing with workforce support and funding.

Tonya will be off air next week, returning solo on August 12th and 19th (possibly with a guest!). Check out her LinkedIn post, "Acronymia: Welcome to the SBA Jungle"!

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact.

Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

This week on SBA Today, we're diving deep into a topic often misunderstood in the world of SBA lending: holdbacks. While conventional wisdom might lead you astray, understanding what's truly allowed—and what's not—can be the key to a smoother transaction.

Hosts Paul Long and Tanya Mazurek are joined by special guest Gregory Kovsky, President and CEO of IBA, the Pacific Northwest's oldest and largest business brokerage firm.

With over three decades of experience as a business broker and a deep understanding of SBA lending, Greg brings invaluable insights, even having represented "Godmother of SBA" Joanna Bruno in the sale of her company.

🎯 In this episode, we tackle:

• The common misconceptions surrounding SBA holdbacks and escrow accounts.
• Why SBA loan funds cannot sit in escrow for more than five business days to facilitate a loan closing.
• The critical distinction: SBA's rules on escrow apply to loan funds, not necessarily seller funds.
• What is allowed: How seller holdbacks are legally structured to protect buyers against trailing liabilities like unpaid taxes, warranty issues, or inventory discrepancies.
• The importance of full disclosure of all holdback agreements in the Purchase and Sale Agreement (PSA).
• Why having knowledgeable professionals—from brokers like Greg and legal counsel to experienced lenders—is crucial for navigating complex business acquisitions and avoiding costly mistakes.

💬 Are you clear on the difference between allowed and disallowed SBA holdbacks? Join the conversation and share your experiences!

For more information about Greg, go to: https://ibainc.com/

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings".

We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️

Join us for a special SBA Today episode! Paul Long and Tonya Mazurek are breaking down major industry news and diving deep into how to build an unshakeable PERSONAL BRAND in today's competitive landscape.

What's on the docket?

• Industry Shake-Up! 🏦 What does this mean for the industry and potential team movements?
• CFR Changes Incoming! 🚨
• But the main event? Unlocking YOUR Personal Brand! ✨

Don't miss this! Tune in to understand industry shifts and level up your brand.

⚖️ This episode is sponsored by: Res/Title your "One Stop Shop for SBA closings". We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and AI property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact. Get started today! www.res-title.com

Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer.

Welcome to a very special episode of SBA Today! Join hosts Paul Long and Tonya Mazurek as they bravely pull back the curtain on the "educational moments" – or as Tonya calls them, "OH CRAP MOMENTS" – that every professional in the SBA lending industry faces.

In this candid discussion, Paul and Tonya reveal real-world experiences and share hard-earned lessons on:

• Credit Pull Timing: When is the right time to pull credit? Before or after a term sheet? Tonya shares why she prefers not to pull credit upfront and encourages customers to check their own.
• Business Acquisitions & Valuations: Do a "quick and dirty value" to understand the ballpark of a business's worth and identify potential missing assets or major add-backs. Beware of improper add-backs, like personal expenses!
• Low Credit Scores & "Good Stories": Tonya shares her experience with "story lending," especially for those with unforeseen credit issues like medical bills. While the SBA is silent on credit and it's lender discretion, structuring deals with more collateral or equity can strengthen challenging situations.
• Underwriting Cash Flow Errors: These are "extremely common" and why lenders must review credits carefully. Mistakes can happen, like transposing numbers or misinterpreting add-backs. Pre-flights and quick cash flow analysis can help prevent these errors.
• Seller Notes on Full Standby Being Paid (Quietly): While "to my knowledge of course not" for their deals, Tonya acknowledges that outside-the-system payments can happen without the lender's awareness.
• Turning Down Deals on Ethics: Both Paul and Tonya agree this is crucial. If there's a "red flag at the beginning," expect more later. Tonya prioritizes the borrower first, even referring them to other banks if a traditional loan is a better fit.
• Post-Closing Paperwork & "Eating Crow": It's common to go back for signatures or paperwork after a deal closes , and as the "face of the bank," sometimes you just "gotta swallow it" and admit a mistake.
• Missed Loan Fees or Vehicle Taxes: Paul admits to getting "caught multiple times" on these, especially with large vehicle purchases where taxes can be a significant, easily overlooked number.
• The Deal You Wish You Hadn't Done: Tonya shares a heartbreaking story of a restaurant startup before the pandemic, where despite bank support, unforeseen challenges led to failure. Paul recounts a similar situation with an older individual who had to sell their paid-off home. These stories underscore the emotional toll and importance of empathy in the business.
• The Importance of Conversation: Tonya passionately argues against just telling clients to "put in a loan application." Having a real conversation upfront helps understand their needs, prevents wasted effort, and avoids unnecessary credit pulls.

Don't miss a beat! Join us live every Tuesday morning on LinkedIn and YouTube! Catch up on previous episodes and explore our family of podcasts: "The BDO Show" and "Art of SBA Lending."

This episode is sponsored by: Res/Title

Res/Title, your "One Stop Shop for SBA closings".

We're your commercial title and closing company that provides you with the tools and technology to give you an instant quote and Al property reports on any deal in the nation. Whether it's for $35,000 or $35 Mil, we handle closings anywhere in the nation with one point of contact.

Get started today! www.res-title.com

⚠️ Disclaimer: The views expressed on this show are our own and not necessarily the views of our employer. ⚠️