Credit Application And Guaranty Agreement: Fill & Download for Free

The general requirements a Lender must meet for SBA to guaranty 7(a) loans are described, in part, in the SBA Form 750, Guaranty Agreement. The Authorization provides specific requirements for each 7(a) loan. Lenders are expected to close 7(a) loans in the same manner in which they close non-SBA loans. Lenders are responsible for knowing how to properly close loans, secure collateral, obtain and perfect the required lien positions, and meet other authorization requirements.SBA relies on representations in the loan application and supporting documents in issuing the Authorization. The SBA guaranty is contingent upon the Lender:Complying with the SBA Loan Guaranty Agreement, SBA Form 750 (SBA Form 750B for short-term loans) and any other required supplemental guaranty agreements between Lender and SBA;Paying the guaranty fee in a timely manner;Complying with current regulations and SOPs;Having no evidence of unremedied adverse change that would prevent disbursement;Satisfying all the conditions of the Authorization; andMaking timely disbursement.Three of the most common deficiencies leading SBA to recommend a cancellation, denial or repair of its guaranty (at the time the lender requests that SBA honor its guaranty) happen at loan closing:Unauthorized, improper, uncontrolled, or undocumented disbursement of loan proceeds.Failure to obtain or adequately document a required equity injection.Failure to obtain required collateral or properly perfect lien position.Closing also is the last time the Lender has an opportunity to discover eligibility and credit problems before the Lender disburses the loan.

So it sounds like your company has decided to purchase an existing business. Regardless of whether the deal is structured as an asset transaction, a stock transaction, or a merger, make sure you know what you are getting into by requiring detailed information from the seller regarding its business operations and finances. The following is a checklist of information and documents you should review.A. Organization and Good Standing.The Company's Articles of Incorporation, and all amendments thereto.The Company's Bylaws, and all amendments thereto.The Company's minute book, including all minutes and resolutions of shareholders and directors, executive committees, and other governing groups.The Company's organizational chart.The Company's list of shareholders and number of shares held by each.Copies of agreements relating to options, voting trusts, warrants, puts, calls, subscriptions, and convertible securities.A Certificate of Good Standing from the Secretary of State of the state where the Company is incorporated.Copies of active status reports in the state of incorporation for the last three years.A list of all states where the Company is authorized to do business and annual reports for the last three years.A list of all states, provinces, or countries where the Company owns or leases property, maintains employees, or conducts business.A list of all of the Company's assumed names and copies of registrations thereof.B. Financial Information.Audited financial statements for three years, together with Auditor's Reports.The most recent unaudited statements, with comparable statements to the prior year.Auditor's letters and replies for the past five years.The Company's credit report, if available.Any projections, capital budgets and strategic plans.Analyst reports, if available.A schedule of all indebtedness and contingent liabilities.A schedule of inventory.A schedule of accounts receivable.A schedule of accounts payable.A description of depreciation and amortization methods and changes in accounting methods over the past five years.Any analysis of fixed and variable expenses.Any analysis of gross margins.The Company's general ledger.A description of the Company's internal control procedures.C. Physical Assets.A schedule of fixed assets and the locations thereof.All U.C.C. filings.All leases of equipment.A schedule of sales and purchases of major capital equipment during last three years.D. Real Estate.A schedule of the Company's business locations.Copies of all real estate leases, deeds, mortgages, title policies, surveys, zoning approvals, variances or use permits.E. Intellectual Property.A schedule of domestic and foreign patents and patent applications.A schedule of trademark and trade names.A schedule of copyrights.A description of important technical know-how.A description of methods used to protect trade secrets and know-how.Any "work for hire" agreements.A schedule and copies of all consulting agreements, agreements regarding inventions, and licenses or assignments of intellectual property to or from the Company.Any patent clearance documents.A schedule and summary of any claims or threatened claims by or against the Company regarding intellectual property.F. Employees and Employee Benefits.A list of employees including positions, current salaries, salaries and bonuses paid during last three years, and years of service.All employment, consulting, nondisclosure, nonsolicitation or noncompetition agreements between the Company and any of its employees.Resumés of key employees.The Company's personnel handbook and a schedule of all employee benefits and holiday, vacation, and sick leave policies.Summary plan descriptions of qualified and non-qualified retirement plans.Copies of collective bargaining agreements, if any.A description of all employee problems within the last three years, including alleged wrongful termination, harassment, and discrimination.A description of any labor disputes, requests for arbitration, or grievance procedures currently pending or settled within the last three years.A list and description of benefits of all employee health and welfare insurance policies or self-funded arrangements.A description of worker's compensation claim history.A description of unemployment insurance claims history.Copies of all stock option and stock purchase plans and a schedule of grants thereunder.G. Licenses and Permits.Copies of any governmental licenses, permits or consents.Any correspondence or documents relating to any proceedings of any regulatory agency.H. Environmental Issues.Environmental audits, if any, for each property leased by the Company.A listing of hazardous substances used in the Company's operations.A description of the Company's disposal methods.A list of environmental permits and licenses.Copies of all correspondence, notices and files related to EPA, state, or local regulatory agencies.A list identifying and describing any environmental litigation or investigations.A list identifying and describing any known superfund exposure.A list identifying and describing any contingent environmental liabilities or continuing indemnification obligations.I. Taxes.Federal, state, local, and foreign income tax returns for the last three years.States sales tax returns for the last three years.Any audit and revenue agency reports.Any tax settlement documents for the last three years.Employment tax filings for three years.Excise tax filings for three years.Any tax liens.J. Material Contracts.A schedule of all subsidiary, partnership, or joint venture relationships and obligations, with copies of all related agreements.Copies of all contracts between the Company and any officers, directors, 5-percent shareholders or affiliates.All loan agreements, bank financing arrangements, line of credit, or promissory notes to which the Company is a party.All security agreements, mortgages, indentures, collateral pledges, and similar agreements.All guaranties to which the Company is a party.Any installment sale agreements.Any distribution agreements, sales representative agreements, marketing agreements, and supply agreements.Any letters of intent, contracts, and closing transcripts from any mergers, acquisitions, or divestitures within last five years.Any options and stock purchase agreements involving interests in other companies.The Company's standard quote, purchase order, invoice and warranty forms.All nondisclosure or noncompetition agreements to which the Company is a party.All other material contracts.K. Product or Service Lines.A list of all existing products or services and products or services under development.Copies of all correspondence and reports related to any regulatory approvals or disapprovals of any Company's products or services.A summary of all complaints or warranty claims.A summary of results of all tests, evaluations, studies, surveys, and other data regarding existing products or services and products or services under development.L. Customer Information.A schedule of the Company's twelve largest customers in terms of sales thereto and a description of sales thereto over a period of two years.Any supply or service agreements.A description or copy of the Company's purchasing policies.A description or copy of the Company's credit policy.A schedule of unfilled orders.A list and explanation for any major customers lost over the last two years.All surveys and market research reports relevant to the Company or its products or services.The Company's current advertising programs, marketing plans and budgets, and printed marketing materials.A description of the Company's major competitors.M. Litigation.A schedule of all pending litigation.A description of any threatened litigation.Copies of insurance policies possibly providing coverage as to pending or threatened litigation.Documents relating to any injunctions, consent decrees, or settlements to which the Company is a party.A list of unsatisfied judgments.N. Insurance Coverage.A schedule and copies of the Company's general liability, personal and real property, product liability, errors and omissions, key-man, directors and officers, worker's compensation, and other insurance.A schedule of the Company's insurance claims history for past three years.O. Professionals.A schedule of all law firms, accounting firms, consulting firms, and similar professionals engaged by the Company during past five years.P. Articles and Publicity.Copies of all articles and press releases relating to the Company within the past three years.

In general, absolutely not.If you have a portfolio of credit cards, and good credit, then you can go from one 0% promo rate card to another, to another, to another. But, at some point, you’re going to begin paying interest. And, those credit card APRs are going to be higher, or double, what you could get from a bank.Cash-flow wise, what credit cards offer are lower repayment requirements than a bank loan (installment loans). — As you can imagine, it’s very complex.If you are very lucky, you might have a 7.9% credit card (c/c) that has a low minimum payment.You may get a bank loan for prime + 1% (which — I’ll just choose 6.5% as an example). You can look up “prime +1” — but, the numbers I’m using here are just pro forma. — It’s an example.What you’ll find is that, if you have a 6.5% installment loan, you have a term (of repayment). — It’s set at the beginning of the loan. You have to pay a certain amount, based on the amount of the initial loan and the interest rate, so that in X number of years, the loan is paid off.A credit card is a revolving line of credit, so you don’t have to pay it off so quickly. Many c/c’s have terms of 13 years or more, so you can pay very little per month, helping you cash-flow-wise, but you will end up paying multiples of the amount you took out at the end of that very-long-term.Let’s take Texas. The maximum interest rate that can be charged, by law — lest it be usury (a felony) — is 18% per annum.Many c/c’s charge more than 18%.Can you get a c/c with an APR of 0% for some period? — Sure.Is it likely your bank will charge you 17% APR on an installment loan? — No.Can you do an interest-only loan? — Sure.These are the “balloon payment at the end” loans. — You take out a loan for $20,000; you only pay the interest each month, and then, you hope, when the term of the loan is over, you can refinance the loan. Otherwise, you will owe $20,000 immediately.If you can’t, and the bank is unwilling to work with you, that makes your collateral forfeit, and it also hurts your credit score.Most of these loans, just like trade credit agreements, have a personal guaranty contract in place, which defeats everything about having a limited-liability type of business construct.Bank loan and credit card financing should be your backup. — Get trade credit with your vendors/suppliers. — These are, by nature, 0% if you pay on time.If you can do that with one trade creditor, then you can start doing it with many trade creditors.If you make concrete, then you will need a cement supplier. — If you can get that supplier to allow you to buy cement on NET 30 terms, then you can buy mostly whatever you want and only have to repay the amount in 30 days. INTEREST FREE.This is how you grow a company. — If you find yourself unable to monetize your receivables within that time frame, then — and only then — hopefully, will you have to fall back on your bank promises or credit cards.A robust capital structure, for most every company, should include a revolving line of credit with a bank. — The goal is never to need to draw that down. To do so is a sign you are in trouble, and the bank knows it.If you are talking about taking out a collateralized installment loan from a bank, then you are talking about (hopefully) necessary CapEx (capital expenditures). — If you need a new work truck, your cement vendor isn’t going to pay for that upfront, and you’re not going to want to come up with the money to pay for it in just 30 days.You may not be able to get, in the beginning, bank loans or commercial credit cards or trade credit agreements without your own personal guaranty. That means — even if you are a corporation or limited liability company, you are still on the hook for the business’s inability to pay.In my experience, I just fill out the applications (for trade credit) and omit the personal guaranty page, as if I forgot to print out the last page or two.You may be approved for trade credit based on what’s on the application, and you’d be a fool to just — because it’s part of the application — fill out the part that says, if the business can’t pay, you will.If you get a call from them saying they didn’t receive the personal guaranty, just say — “Oh. That’s because my assistant is new. He is terrible at his job and I’m gonna have to fire him. I’ll get it to you as soon as I can get back to the office.”LOL — and then, don’t send it.An FDIC-insured bank is not going to let you off like that.A commercial credit card issuer might let you off with no personal guaranty, but expect the rate to be high.Only when you spend lots of time assembling a portfolio of 0% or other low promo rate cards will he credit card aspect be cheaper than the banks.The credit cards just have lower minimum payments than bank loans do. — That’s going to be true whether you have an installment loan or an interest-only loan, in most cases.