Description

If SBA financing still feels like a black box, this conversation will flip on the lights. Senior Vice President and National Sales Manager for SBA Lending at Mission Valley Bank, Michael Carlson (UCLA Anderson MBA, CFP® professional), joins us to break down what SBA loans really are, how they’re funded, and when they’re a better fit than conventional bank loans.

We cover the two flagship programs—7(a) and 504—including when to use each, how the 504’s two‑loan structure with a CDC works, and why the 7(a) is often chosen for flexibility. Michael explains down payment requirements (including scenarios that can be effectively 0% down for owner‑occupied real estate expansions), fixed vs. variable rates, 25‑year vs. 10‑year amortizations, and when short interest‑only periods make sense.

You’ll also hear how lenders actually underwrite these deals:

• What lenders look for beyond credit scores: character, relevant experience, and global cash flow.
• Cash‑flow math made simple: add‑backs (depreciation, amortization, interest, officer comp adjustments, rent replacement), and why DSCR of ~1.25x is standard (SBA can go down to ~1.15x in some cases).
• Collateral & guarantees: how SBA collateral “discounts” work, when personal real estate may be pledged, and why 20%+ owners must personally guarantee.
• Prepayment penalties explained: typical 7(a) 5‑3‑1 vs. 504 schedules (e.g., 5‑4‑3‑2‑1 and longer) and the >20% annual prepay trigger.
• Timeline & costs: realistic 45–90 day process and the SBA guarantee fee (often up to ~3.75%) that can be financed into the loan.
• Myth‑busting: SBA doesn’t lend directly (banks do), it isn’t free money, and it isn’t a one‑day approval—or a year‑long gauntlet.

Who this is for: Business owners buying or refinancing owner‑occupied real estate, acquiring a company, funding equipment or inventory, or seeking working capital—especially first‑timers who want a clear, candid walkthrough of the process and paperwork (tax returns, PFS, debt schedules, resumes, and more).

Resources: 

*To explore your options with Mission Valley Bank, contact Michael Carlson at mcarlson@missionvalleybank.com,

*If you’re exploring SBA financing, loop in your CPA and advisor early to prep clean financials and speed up underwriting.

Disclosure: The host serves on the Board of Directors of Mission Valley Bank.

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