SBA Loan For Independent Insurance Agents
SBA loans are available for Independent Insurance Agents and can be used for the following:
- Refinance a 2 year old seller note.
- Purchase or refinance agency occupied real estate.
- Purchase another insurance agency or “book of business”.
- Refinance equipment, systems or other agency-debt.
Below are some general guidelines. These are NOT written in stone, so please contact me at 1-800-414-5285 or jking (at) green commercial capital (dot) com if you have a scenario that does not line up perfectly with what is shown here…
- Agency should have at least $1,000,000 in gross revenue in each of the past three years.
- Agency should have at least $5,000,000 in premiums written in each of the past three years.
- Property and casualty insurance agencies only. No life insurance agencies.
- Independent insurance agencies only. (“Captive” agencies can be more difficult).
- Loan to value, as determined by an SBA-approved third-party valuation service, should be approx 75%.
- “Primary” guarantor should have approx 5 years insurance agency management experience.
- Minimum “primary” guarantor FICO credit score: 675
- Assignment of life insurance on the guarantor in an amount equal to the loan
- Junior lien on personal residence typically required
- If less than 2 guarantors, acceptable documented succession plan should be in place
- Minimum loan size: $500,000
- Maximum loan size: $5,000,000
- Term: 10 years (unless real estate is the largest percentage of the purchase price, then a 25 year amortization is possible)
- Rate: Prime plus a margin not to exceed 2.75% (variable rate)
Click here for more information on the SBA 7a program for business acquisitions.