What does your post SBA capital stack look like?

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October 02, 2022

by a searcher from University of Georgia in Los Angeles, CA, USA

Hey folks!

I have been running an inventory heavy business for years. I have a SBA 7a term loan to finance the debt, but since I’m growing by 50%+ a year, I need more debt.

What does your capital stack look like, or what would you suggest?

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Lee - I would be more than happy to have a conversation with you to discuss potential options. Most SBA 7A lenders have a general UCC in place that ties up all collateral. That will often times restrict you in what you can borrow from other institutions. However, the SBA does not really put any reliance on A/R in their collateral formula. Because of that if you need more capital to grow it might be possible to get your lender to release the A/R portion from their UCC, which would open you up to a wide variety of A/R financing options from factoring to asset based lines of credit. We have done quite a bit of lending to quickly growing businesses, even if cash flow is not fully there to support borrowing needs. Again, I am more than happy to discuss options and I can be reached at redacted
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Reply by a searcher
in Tampa, FL, USA
Congrats on your 50% growth! Here has been my experience getting business LOC.

If you have at least 2 solid years of tax returns, then your best terms / rates are going to be smaller local banks & credit unions. You really have to know your turn rate and margins then factor in your ROI given the terms of the debt. I have been able to get up to 100K unsecured rather easily with each bank. It seems like much above that they want to secure the debt and do a UCC1. Stay away from any online lenders. Most of those terms will kill your margins. There has been a program through AMEX that allows you 90 days to float the invoice at a great rate. Assuming 90 days would be enough time.
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