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Case Studies

Small Business Lending: Independent Insurance Agent

Summary

$606,000 (95% Financing) | SBA 7(a) Loan | 25-year term | Philadelphia, PA

See what an SBA 7(a) loan and CapitalSource's creativity and flexibility can do for your small business.

Small Office Building

CapitalSource Small Business Lending provided a loan to an independent insurance agency that illustrates both the power of SBA financing and the creativity and flexibility at CapitalSource. A $606,000 SBA 7(a) loan allowed a State Farm insurance agent to go from renting slightly more than 1,000 square feet in an older building with no street frontage to purchasing a newer, 4,100-square-foot building with high-end finishes and great street exposure while reducing his total monthly cost of occupancy by $500. In addition, the borrower’s total equity injection for the transaction was only 5% of the loan amount, or $30,000, and the transaction took just under 40 days from loan approval to closing.

Our borrower would not have had the required 25% equity injection of $150,000 or been able to manage a loan term shorter than twenty-five years. With the longer term SBA loan obtained through CapitalSource Small Business Lending, he was able to stop throwing money away on a monthly lease payment and follow a plan that will allow his growing business to thrive.

The new property—2,200 square feet of usable office space—will accommodate future expansion and is more central to his overall client base. And, in addition to all the benefits he currently enjoys with the improved property, he will have accumulated significant equity value in his new property when he retires.

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