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Test your SBA knowledge

Small Business LoanFrequent question and answers regarding SBA loan program


1-What is the maximum loan limit for 7a loan program?
A. $5,000,000 B. $200,000 C.$20,000

2- How much is the maximum amortization period that 7A Loan program offer for business loan without property?
A. 10 Year B. 25 Year C. $15 Year

 

3. What amortization period will have 7A loan for commercial real estate improvement?
A. 25 Year B. 25 months C.10 Year

4. How much is the 51% of 10,000 sgft building?
A. 5100 B. 51000 C. 510

5. What is the standard 7A real estate prepayment penalty?
A. 5—3—1 B. 3—2—1 C. 1—3—5

6. Personal guarantee is one of requirement of Small Business Loan?
A. Always B. Sometimes C. Never

7. What is the fee for assuming SBA loan of $1,250,000?
A. $12500 B. $125000 C. $1.5%

8. There is a balance of $1,500,000 on 7A loan on existing industrial building, in the case of early pay off in the second year how much would be the prepayment penalty?
A. $45,000 B. $75,000 C. $15,000

9. Tom lee purchased 25000 sgft building and he wants to lease 40% of his space. How much is the 40% of 25000 sgft of the subject property?
A. 10000 B. 25000 C. 15000

10. What index rate is usually used by SBA lenders to make  7A loan?
A. Prime Rate B. Libor C. T- Bill

11. Who guarantee the SBA loan?
A. Small business administration B. Federal reserve C. FDIC

12. Small Business Loan has assumable provision in their loan documents?
A. always B. One time only C. Never

13. In order to qualify for Small Business Loan what is the minimum occupancy required by the borrower?
A. 51% B. 510% C. 5.1%

14. How much is the maximum 7A loan you can have?
A. $5,000,000 B. $200,000 C. No limit

15. Do you have to have green card in order qualify for SBA loan?
A. True B. False C. Never

16. The borrower has to sign the form 4506 for the verification of their tax returns for obtain SBA.
A. Always B. Never C. Seldom

17. The SBA was created in what year by congress?
A. 1953 B. 1923 C. 1239

18. The SBA loan is fully amortized?
A. Yes B. Partially C. Sometimes

19. How much was the total funding of Small Business Loan for fiscal year 2005?
A. $16 Billon B. $1,600,000 C. $16,000,000

20. How much was the total funding of SBA loan for fiscal year 2004?
A. $12,5 Billion B. $1,200,000 C. $120,000,000

21. Seller of business opportunities has to sign the form 4506 for the verification of business
tax return?
A. Always B. Never C. Seldom

22. Which of the following is the correct formula for capitalization?
A. Net operating income divided by the price B. Price divided by gross operating income

23. If a shell gas station is priced at $800,000 and has a net operating income of $100,000.
What is the cap rate? NOI divided by price = Cap rate
A.12.5% B. 10% C.9%

24.Your client is considering to purchase a car wash business. The seller claims a NOI of
$300,000. Your minimum acceptance Cap rate is 10%. What price will your client pay at that
Cap rate?
NOI divided by cap rate = Price
A. $3,000,000 B. $300,000 C. $30,000

25. What is debt coverage ratio (DCR)?

A. Net operating income divided by the annual debt service
B. Gross operating income divided by the mortgage payment

 

Shawn Rabban (310) 714-5616