7(a) Loan Program: The SBA Loan program utilized for all business purposes including real estate purchase, refinance, equipment purchase, business purchase and expansion. Pacific Capital Bank makes the loan with a guarantee of between 75% and 85% by the U.S. Small Business Administration.

504 Loan Program: The SBA Loan program utilized for real estate purchase. Pacific Capital Bank generally makes a loan of 50% of the real estate project in a first position. The SBA makes a second loan for 40% of the real estate project in a second position and the borrower injects 10% of the real estate project.

Collateral: Collateral is any tangible real property pledged as security for a loan. Pacific Capital Bank requires the value of collateral be at least 1:1 to the loan amount as long as it is available to pledge.

Conditional Commitment: Subject to certain requirements and unless all parties agree or comply with requirements (example: MUST NOT EXCEED 75% Loan to Value) the loan may never be funded.

Debt/Worth Ratio: The debt to worth ratio is the company or personal debt divided by the company or personal equity. Pacific Capital Bank requires a ratio of less than 10:1.

DSCR: The ratio of cash available for debt service divided by cash needed to service personal and business debt (including proposed loan payment). Pacific Capital Bank will require a DSCR of more than 1:1.

Eligibility: A set of rules devised by the SBA to determine weather a loan qualifies for a SBA Guarantee (example: Size Standards, type of business, use of loan proceeds).

Equity: The net worth of a company or individual. Pacific Capital Bank requires that the equity of a company be sufficient to calculate an acceptable Debt/Worth ratio.

Expansion: The addition of a location for an existing business.

Injection: The amount of money contributed to a project by the borrower. Pacific Capital Bank requires 10% for real estate acquisition and 30% for start-up or business acquisition.

Loan To Value (LTV): The ratio of loan amount divided by property value. Pacific Capital Bank will lend up to 90% LTV (90% of the value of the property).

Prequalification Letter: Letter outlining the terms under which an SBA loan would be considered.

Projections: The projection income, expenses and profits of a company for a given time period. Pacific Capital Bank will only consider projected income if it can be substantiated and is realistic according to industry standards.

Revenues: Revenues are the total sales of a company for any given period.

SBA Guarantee: The percentage of dollar amount of a loan that the SBA is willing to guarantee in the event of default under the loan documents.

Seller Carry Back: An amount that the seller of a business or real estate lends to the business in place of or as part of the borrower's injection.

Size Standards: The level of sales or number of employees for any given industry that the SBA has determined as eligible for consideration as a "Small Business" under SBA Eligibility guidelines.

Stand-By/Subordinated Debt: A document executed by a seller when a Seller Carry Back is utilized insuring that the Seller Carry Back is in a junior position to the SBA Loan.

To speak with a Financial Services Representative,
please call: 1-866-970-4400