Pre-Qualification for SBA 7(a) Loans: Access to Debt Capital for Entrepreneurs
Mainshares works with entrepreneurs to pre-qualify their access to debt capital through SBA 7(a) lenders and loan brokers. By being pre-qualified, entrepreneurs, investors, and brokers can be confident that the entrepreneur will likely be able to secure an SBA 7(a) loan for the transaction.
What types of debt sources are considered?
Currently, our debt partners will only pre-qualify entrepreneurs for SBA 7(a) loans and conventional loans, if the anticipated transaction will need debt in excess of the SBA’s $5M cap.
How does the amount being pre-qualified get determined?
The amount being pre-qualified gets determined based on the entrepreneur’s background, credit, and net worth. For entrepreneurs without large assets, such as a house, they may find that their pre-qualification amount is less than the SBA’s $5M cap.
Who handles pre-qualification for debt financing?
Mainshares works with nationwide partners to handle the pre-qualification. These partners review the personal financial statements of the entrepreneurs and often conduct virtual interviews before issuing the pre-qualification status. This status often comes along with a letter of support to provide to relevant counterparties.
How long does it take to get pre-qualified for debt financing?
Our partners can typically get an entrepreneur pre-qualified within a week. The timeline is often constrained by the availability of both parties to schedule a virtual meet-and-greet.
Does the pre-qualification come with a commitment to use that lender or loan broker?
No. There is no commitment.
Why should I get pre-qualified?
Many owners and brokers are not very familiar with the SBA 7(a) program and are suspicious of an individual buyer’s ability to finance a transaction, especially if their net worth or liquid assets are below the purchase price of the business.
By getting pre-qualified, entrepreneurs can show that they have low execution risk with the transaction.