Category Archives: Business Advice

Refinance Your Conventional Business Loan into a SBA 504 Loan

leticia-scearce_biltmore-bankThe SBA Debt Refinance Program is back! Does your small business have a maturing or high-cost conventional loan for real estate, buildings or equipment? The long-term, fixed rate financing available through the SBA Debt Refinance Program can help small businesses that face significant balloon payments, require financial flexibility or want to take cash out from appreciating assets for expansion.

Under the new program, small businesses that refinance into a SBA 504 loan can take advantage of lower rates, fixed for 20 years, to lighten their monthly debt payments, improve cash flow and stabilize operations.

These parameters can help determine whether this program might be a good fit for your business:

  • The debt to be refinanced must be at least two years old.
  • The debt to be refinanced must be current during the last 12 months.
  • Eligible small businesses can obtain up to 90 percent financing for secured debt and qualified business debt.
  • Eligible fixed assets include real estate and equipment.
  • Cash out for operating expenses, including debt consolidation, is limited to 75 percent loan-to-value.
  • Cash out can be used for eligible business expenses (salaries, rent, utilities, inventory).
  • Existing government guaranteed loans are not eligible to be refinanced.
  • The eligible debt being refinanced is for the outstanding principal balance.

Other conditions or qualification requirements may apply. 

For those considering applying for a new loan, we offer a variety of government guaranteed loan products that require less cash investment up front and offer longer loan terms, which can help bridge the gap for businesses that otherwise would not have access to capital.

  • SBA 7(a), 504 and 504 refinance
  • SBA Export Express Export Working Capital International Trade
  • USDA Business & Industry Loans Food Desert Rural Energy for America Program (REAP)
  • Export Import Bank of U.S.

If you would like more information on the SBA 504 Refinance Program or any of our government-guaranteed loan products, please contact Leticia Scearce, Senior Vice President/Government Guaranteed Lending Manager, at lscearce@biltmorebankaz.com or (602) 445-6511.

fdic

fbtwitterLinkedIngp

Government Guaranteed Loans and Helping Businesses Grow

leticia-scearce_biltmore-bankSecuring a business loan can be vital to a company’s growth or even survival. Senior Vice President Leticia Scearce, head of Grandpoint’s Government Guaranteed Lending division, shares some great loan options that are available through various government programs which can be facilitated by the Bank and its divisions, Regents Bank, The Biltmore Bank of Arizona and Bank of Tucson.

Q: What should people know about the government guaranteed lending programs that are available?

LS: Government guaranteed loans are there to help small- and medium-sized businesses, since these loans require less cash investment up front and offer longer loan terms. Government guaranteed loans can help bridge the gap for small- and medium-sized businesses that otherwise would not have access to capital.  Also, many businesses that could qualify for conventional loans opt for government guaranteed loans instead because they require less money down and have longer terms. When opting for guaranteed loans, clients usually pay two percent more in fees for 10 to 15 percent cash down versus the 30 percent down for conventional loans.

The most well-known government guaranteed loan programs are those offered by the Small Business Administration (SBA) loans.  These loan programs can include financing for owner-occupied real estate purchase or construction, refinance, equipment, business acquisition, exporting and short term working capital (revolving lines of credit).

Another very attractive loan program is available through the United States Department of Agriculture (USDA).  Eligible USDA loans can be for real estate and equipment (including renewable energy projects) in rural or farming areas and can have a loan term up to 30 years. In addition, there are a few subprograms under the USDA loan program umbrella that allow us to finance projects in urban areas that have a local foods component – food manufacturing, distribution, retail, etc. The USDA loan product is attractive because it offers the longest term of the government guaranteed loan programs; is more flexible in pricing and prepayment penalties; has less oversight with franchises and dealer agreements; and has less regulation overall. It needs to be mentioned that even though the program is offered under the U.S. Department of Agriculture, the financing of eligible projects / properties under this program do not need to be agriculture related.  Rather, its availability is contingent on the current population levels of a specific census tract in which the business or property will be located.

Q: What is the current status of government guaranteed lending?

LS: We’re hitting record levels of government guaranteed lending as the economy is improving. One reason is that the banks’ lending standards for conventional loans haven’t changed much since the recession, which makes guaranteed loans more attainable and attractive.

Q: Have you seen any big changes in the government guaranteed lending programs that business owners should know about?

LS: We saw a big change recently in the SBA 504 program. This product offers low cash down and a 20-year fixed rate on the client’s second loan, which is financed by the SBA. The agency now allows the client to refinance existing loans on owner-occupied real estate and allows some cash out provisions, helping the small business owner access capital for long-term working capital.

Q: How do the members of the government guaranteed lending program for Grandpoint Bank and its divisions work together to assist clients?

LS: We are tasked with helping all our regions expand our government guaranteed lending, which is a combination of SBA loans, USDA loans and export loans. I’m based in Phoenix at The Biltmore Bank of Arizona, along with Debbie Lindsay, our loan administrator. My team’s loan specialist/underwriter, Marchette Wesley, and portfolio servicer, Hector Palomares, are in California, and I travel to our offices throughout Arizona, California and Washington to train our staff about our guaranteed loan platform.  We assist our relationship managers in deepening their knowledge base with the different loan products we have available. We also train our credit staff so they can recognize when a conventional loan isn’t suited for a client and a government guaranteed loan could offer a great alternative.

Mark Phillips, Grandpoint Capital’s chief credit officer, and David Ross, Grandpoint Bank’s chief credit officer, and our regional bank presidents have been very supportive of our division and expansion.

Q: How is Grandpoint Bank, and its divisions, differentiating itself in this type of lending?

LS: Our Southern California and Vancouver, Washington markets do a lot of export business, so with our large geographic footprint and sizable lending capacity, we can target more middle market customers.   In Arizona, we have more rural opportunities, and thus the USDA programs are a great fit. We are already one of the top lenders in the state for USDA loans.  We are looking forward to expanding our footprint in USDA lending in all of our markets.   Seventy to 90 percent of government guaranteed loans don’t count against a bank’s legal lending limits, so we have more capacity to service larger companies as well.

Q: How did your career lead you to becoming the head of the government guaranteed lending division?

LS: I was drawn to SBA lending in 2007 when I was working in commercial lending at a community bank here in Scottsdale. I further progressed into this niche lending sector during the recession when the credit markets froze and guaranteed loans became even more essential. When I joined The Biltmore Bank of Arizona in 2011, I helped established the SBA department, and a year later I pushed for expansion into other government guaranteed loan programs such as USDA loans and export financing.  A diverse, more inclusive platform was important to our brand and to our customer base, and I was fortunate that key management at Biltmore trusted and supported my recommendations. In 2012, Biltmore Bank was acquired by Grandpoint Bank, and with the backing of a larger bank, it allowed us to expand our lending efforts even further.  Personally, Grandpoint gave me access to a larger platform with great management resources to help expand and develop this lending niche. Prior to the acquisition, our government guaranteed lending activity was small, but many of the banks acquired by Grandpoint around the same time had SBA loan portfolios, so my servicing and liquidation role increased. Soon thereafter, our senior management team decided to expand this niche of lending for the whole family of banks. I’m pleased to have a very amazing team. We all have to stay up to date on policies and procedures for all of these programs. This type of lending makes you a better banker, because it requires a complex level of understanding and mastery of detail; it makes you sharper.

Q: Are you involved in any civic work?

LS: I serve on the City of Phoenix Investment Advisory Board, which advises the city on its entire investment portfolio.

Q: What do you like to do for fun?

LS: My husband and I are into cycling, and I love to hike. I also enjoy cooking and baking, and I’m a wine connoisseur. We have visited more than 100 wineries, and I’d love to become a sommelier someday. More immediately, I’d like to look at growth and loan opportunities in the wine industries throughout the various regions we serve. I also enjoy reading, gardening, and I am a big tennis fan!

screen-shot-2016-09-20-at-2-58-01-pm

fbtwitterLinkedIngp

Business Tips for the New Year

2015Small

Happy 2015! With the dawning of the New Year, many folks concentrate on getting their business affairs in order. Before we get too much further into the year, we’d like to share a few business tips and highlights of new laws that can help you hone your competitive edge.

Business Tips

  • Review your cyber security. Ensure that your anti-virus software still meets your security needs, and check regularly for software and operating system updates and patches. Other preventive measures include providing firewall security for your Internet connection and encourage or require employees to password protect and use security apps on any of their handheld devices that may contain data pertaining to your business. Be sure to train your employees in all security protocols.
  • Stay up to date on compliance deadlines. Be aware that states periodically change compliance deadlines, forms and fees. Reviewing these details well in advance can help you avoid late fees and loss of good standing. Schedule Outlook or smart phone reminders to stay on top of deadlines.
  • Revisit your business plan. You went through all that trouble to create a great plan to take the business world by storm, so it shouldn’t be left idle….
  • Rev up your professional networking. Even if you’re already a power networker, review your business association memberships and decide which are still relevant to you and how they fit into your budget. Consider whether you should expand your networking circle, and don’t forget to consider conference and convention opportunities for 2015. Get your employees involved too. They’ll benefit from the new connections, continuing education opportunities and the satisfaction of attracting new customers to your business.
  • Reassess your online brand. If you don’t already have a Google Alert set for your company, do it now. Consider adding Google Alerts for the names of your top executives and any branded products or services you provide. Look up your company’s name on search engines to see how quickly your firm pops up. If your online brand is suffering, either from negative reviews, an outdated website or lackluster search engine optimization, don’t wait to address the issues. First impressions are hard to reverse.

New Laws

California has several new laws taking effect in 2015 that may impact California businesses. A few of those include:

  • Mandatory Paid Sick Leave.  Starting July 1, all California employers are required to provide paid sick leave to any employee who works in California for 30 days, at an accrual rate of one hour for every 30 hours worked.
  • Harassment Training. Starting January 1, employers who employ 50 employees or more anywhere are now subject to mandatory sexual harassment prevention training to all California-based supervisors to include the prevention of “abusive conduct.”
  • Unpaid Interns & Volunteers. Starting January 1, unpaid interns and volunteers are now entitled to protection from harassment, discrimination and retaliation.

Additional laws affecting California businesses will take effect this year, so please consult with your attorney and/or human resources professional for more information about all new legislation that may affect your business in 2015.

A new year is full of possibilities. We hope this article is helpful in supporting all the grand plans your firm will implement this year. At Regents Bank, we are proud to be a consultative business partner for our clients as they continue to lead and transform their industries, and we look forward to working with you to make all of your New Year’s possibilities become realities.

screen-shot-2016-09-28-at-7-28-21-pm

What Does All of This Economic Data Mean For Your Business?

Man With Question Marks

Headline from the San Diego Union Tribunescreen-shot-2016-09-13-at-11-07-51-am this weekend: “Economy Gains Steam, Adds 200,000 Jobs”.

In an article released last Friday from Vistage titled “More Hiring, More Investing, Better Economy: Vistage CEO Confidence Index”screen-shot-2016-09-13-at-11-07-51-am some of the numbers cited were:

  • The CEO confidence index reported its largest quarterly gain in two years, a remarkable 18 percent increase.
  • “Net increases in employment were planned by 55 percent of all firms,” the report states. That’s the “highest percent that planned job additions since 2007”.
  • Seventy-three percent of all firms expect revenue growth, up from only 62 percent in the prior quarter. That rate is “much closer to the year-ago level of 77 percent.
  • Improved economic conditions were cited by 41% in the 4th quarter, up from just 18% in the 3rd quarter. Just 12% thought the economy had recently worsened. When asked about prospects for the year ahead, additional economic gains were expected by 40%, twice the 20% recorded in the 3rd quarter.

And these are just a portion of the numbers given.

Pick up the Sunday Wall Street Journalscreen-shot-2016-09-13-at-11-07-51-am and you’ll find numbers and statistics galore. The numbers reflecting the economy are positive, and this could bode well for small-medium size businesses this year. But how do you, running your business which has its own micro-economy and financial statistics, know what the short and long-term impact of all this data means to you?

We won’t claim that we can tell the future. We won’t predict what interest rates will be next month. We won’t guess when Federal Reserve policy changes will happen which will free up more credit for businesses to expand. But what we will do, what we do best, is consult with you about all of this data and develop strategies for you and your business. Talk today with a Regents Banker and ask for an interpretation of all of this data and ask what the real world impact it has on your business. You’ll get straight answers and honest advice. It’s how we’ve built our business the last 10 years, and it’s why we’ve become the trusted advisor that so many San Diego businesses turn to.

Regents Bank has offices in La Jolla, Downtown San Diego, El Cajon, Carlsbad and Vancouver, WA. Learn more about Regents Bank at www.regentsbank.com.

screen-shot-2016-09-28-at-7-28-21-pm________________________________________________________________________________________________________________________________

screen-shot-2016-09-13-at-11-07-51-am Linking to Non-Regents Bank Websites

This icon appears next to every link that directs to a third party website not affiliated with Regents Bank. Please be advised that if you click this link you will be taken to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Regents Bank. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Regents Bank assumes no liability for the content, information, security, policies or transactions provided by these other sites.

Do People Really Know What Your Company Does?

What DoesMy Company Really Do?As a business owner/manager, when someone asks you what your company does you may be like the majority of people that have developed the famous “30 second elevator pitch” that describes a service(s) that you offer. And that’s ok. But it’s more of a statement of fact that leaves it open to the interpretation of the listener as to how that could help them.

For example, a Regents Banker that is asked “What do you do for a living?” could respond, “ I work at Regents Bank San Diego where we offer a complete portfolio of business products to San Diego businesses, such as business checking accounts, online banking, lines of credit and commercial loans.” And this would be a solid factual answer. But does it really answer the question, which was “What do you DO?” Not really. The answer revealed what services the bank offers.

The underlying question in most cases when people ask what you do, particularly at a business function, is ‘What do you do that can benefit me and my business?” That is the question you want to be prepared to answer.

In this example, our banker would have better answered that question by saying, “I work at Regents Bank where we offer a complete portfolio of banking products, but the most important service our clients tell us we offer is something called Regents Bank “Consultative Banking”, which is where we spend one-on-one time with them to really understand their business and their goals. We then tailor make custom financial solutions which help their revenues and profit margins grow.” And that is what San Diego business bank Regents Bank really does and why we are a very valuable asset to our customers and their businesses.

So what do you really do for your customers? What is the underlying benefit to them from the product or your service you bring to the marketplace?  What’s in it for them? As the old adage says, “People don’t buy drills, they buy holes.”

Regents Bank is a San Diego business bank with offices in La Jolla, downtown San Diego, El Cajon, Carlsbad and Vancouver, WA. Visit us online at www.regentsbank.com to learn more.

screen-shot-2016-09-28-at-7-28-21-pm

Just 3 Things…

Regents Bank San Diego and Three Planning Questions

3 Simple Planning Questions That Can Change 2012 For You

 

End of year planning can be difficult with so many employees taking time off, year-end accounting, customer and employee appreciation events…so many things vying for our time and attention. With that in mind, extended planning time for next year, if not done by now, is most likely not going to happen.

Here is a concise way for you to put some thought into planning ahead for 2012. Take time to ponder these three questions and be sure to write the answers down where you can find them tomorrow:

  1. What did we, as an organization, do well in 2011?
  2. What could we have done better in 2011?
  3. What is the one thing that if we do well in 2012 will provide the biggest increase in profitability for the organization?

The answer to question number one will make you smile, to number two will make you wince, and to number three will make your furrow your brow. But all three, if you put some real time and thought into your answers will make a major difference in your results next year.

This next step is critical. 24 hours from when you put your pen down after answering these three questions go back and read what you wrote. You’ll have thought of things to add to all three questions because your mind will have been turning them over. The thoughts you add may very well provide your biggest breakthrough for 2012.

We wish you much success and prosperity in the year that is just around the corner and which provides us all a blank slate to create a great story to enjoy at the end of next year.

Regents Bank  is a premier business bank in San Diego and has offices conveniently located in La Jolla, Downtown San Diego, Carlsbad, El Cajon and Vancouver, WA. For details on Regents business banking services visit www.regentsbank.com or visit one of our offices for a confidential visit with a Regents Banker.

screen-shot-2016-09-28-at-7-28-21-pm

“Considering a Real Estate Purchase? Talk to Your Banker First” by Barbara Hunter

Barbara Hunter, Sr. V.P. Regents Bank San Diego

Barbara Hunter, Sr. V.P. Regents Bank, Carlsbad CA

Barbara Hunter, Sr. Vice President of Regents Bank, San Diego recently published an article in Commercial Property Executivescreen-shot-2016-09-13-at-11-07-51-am magazine titled, “Considering are Real Estate Purchase? Talk to Your Banker First”. In the article Barbara addresses:

  • Why a banker makes the difference between success and failure in a purchase.
    Advantages and disadvantages of investing in commercial property.
    How your financial statement can impact financing.
    Hidden issues that can impact your decision.
  • and many more informative and important considerations.

For further information contact Barbara at 760-931-5140 or bhunter@regentsbank.com.

screen-shot-2016-09-28-at-7-28-21-pm________________________________________________________________________________________________________________________________

screen-shot-2016-09-13-at-11-07-51-am Linking to Non-Regents Bank Websites

This icon appears next to every link that directs to a third party website not affiliated with Regents Bank. Please be advised that if you click this link you will be taken to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Regents Bank. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Regents Bank assumes no liability for the content, information, security, policies or transactions provided by these other sites.

Successful Negotiations: Creating Allies

Regents Bank San Diego Business Summit

Winning Solutions Benefit Everyone

 

Contributed by Ben Price
First Vice President, Regents Bank San Diego

Regents Bank recently helped host the San Diego CEO Summit featuring Jack Kaine, a seasoned consultant and highly rated Vistagescreen-shot-2016-09-13-at-11-07-51-am speaker who discussed Negotiating for Success. Below are five simple rules for effective negotiations:

1.  The person who speaks first sets the tone for the negotiation.

Your opening remark in a negotiation is critical and must be scripted and practiced. You never get a second chance to make a good first impression.

2.  The person who asks the most questions determines the content and the direction of the negotiation.

Think about your questions before, not after the initial meeting. Be prepared with both  an opening script and questions needed. Anticipate what questions you may be asked and consider who else is influential in the process.

3.  Never argue. No one ever won an argument. Always question for understanding.

When appropriate, try the “forbearance” tactic – do nothing. This may lead to the other person sweetening the deal. Never leave a meeting without a next step scheduled.

4.  People do things for their reasons not yours.

Find out what the other side wants and help them get it. Know what makes you different, and why they would pay a premium for you.

5.  The person who listens the most will have the greatest effect on the outcome of the negotiation.

Are you listening to learn, or to talk? Listen completely, evaluate, then respond. Ego can make us poor listeners.

Remember, a successful negotiation has occurred when both sides are satisfied with the outcome.

**The 2012 SISO CEO Summit will take place at the Grand del Mar Resort in San Diego, CA, March 25-28, 2012.

screen-shot-2016-09-28-at-7-28-21-pm________________________________________________________________________________________________________________________________

screen-shot-2016-09-13-at-11-07-51-am Linking to Non-Regents Bank Websites

This icon appears next to every link that directs to a third party website not affiliated with Regents Bank. Please be advised that if you click this link you will be taken to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Regents Bank. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Regents Bank assumes no liability for the content, information, security, policies or transactions provided by these other sites.

Commercial Office Space: Lease vs. Buy? Leasing Pluses and Minuses – Part II

Regents Bank San Diego Leasing Blog Post

Contributed by Barbara Hunter, Sr. Vice President, Regents Bank, Carlsbad, CA

As with ownership, leasing your office space can have both positive and negative advantages. With leasing, you have the flexibility to easily relocate your business at the end of the lease term. Perhaps you would prefer to be in a different market or there is a more prestigious and or modern building in a better location. Or you may have simply outgrown your space.

Leasing eliminates many of the risks of building ownership discussed earlier in the article. It also frees you from the burdens of property maintenance and other property management issues which now become the responsibility of the landlord.

Leasing frees up cash that can be used to fund the growth of your business. Typically the only cash outlay required in a new commercial lease is one or two months rent value as a security deposit. By contrast, purchasing your space can require down payments and closing costs, which can  total up to thirty percent of the purchase price, less if SBA financing is available.

The main disadvantage of leasing is the lack of equity build-up in your property. As mentioned, real estate has historically appreciated in value over most ten-year holding periods. If the holding period is increased to twenty or thirty years then the appreciation can be even more significant.

When leasing your space, there is less flexibility in the modifications that can be made. Even if those modifications would be paid for entirely by the tenant, the landlord has the right to disapprove them if he/she feels the improvements will make it harder to re-lease the space should you relocate at the end of the term.

Unless you have negotiated renewal rights into the lease agreement, you are not guaranteed the right to remain in the space at the end of the lease term. Perhaps, the adjoining suite is occupied by a tenant that is running out of room and needs to expand into the space. If the tenant currently occupies a significant amount of space in the building or is a key tenant within the building the landlord will have no choice but to decline your request to renew and keep the key tenant instead. However, he/she may offer you the option of relocating to another space within the building if it is available.

The lease vs. buy decision is not an easy one for most businesses, but if you fully understand the advantages and disadvantages to each, then you’ll make the decision that’s right for you.

screen-shot-2016-09-28-at-7-28-21-pm

Commercial Office Space: Lease vs. Buy? Ownership Pluses and Minuses – Part I

Regents Bank Loans for Commercial Office Space Purchasing

 

Contributed by Barbara Hunter, Sr. Vice President, Regents Bank, Carlsbad, CA

The decision to own versus lease your office space can have a significant impact on your business. For many businesses, there are many choices and not all are clear. In this two part series we’ll examine the pros and cons of each option. We recommend that you consult with an experienced Regents Bank professional to assist you with this important decision.

The Pluses and Minuses of Ownership

There are numerous advantages to ownership. With free-standing buildings, ownership gives you the control to operate and improve the building as you see fit. Being able to change the appearance of the property and place visible signage can be one of the best marketing tools for your business.

The financial benefits of owning include tax savings, potential appreciation and additional rental income. The tax savings come from depreciation allowances and mortgage interest paid during the holding period. Appreciation comes from capital gains proceeds at the time of sale.

Over most ten-year holding periods, real estate has historically appreciated in value. However, as we have seen in the past decade, there can be significant peaks and valleys in the real estate cycle making a real estate investment a concern.  Many owners have fared well and have built great equity.  There are others that lost the equity, but many purchased properties that were too large for their business or cost too much per square foot.  Making sure a potential buyer discusses the pros and cons of the purchase with their banker and CPA many times will make a big difference in the cost of the property.

If a portion of the property is rented, income from tenants can be used to pay part of the mortgage, fund the business or capitalize other needs as you see fit. Another idea to consider once the owner is ready to “exit” the business through a sale, they may still want to maintain the real estate as an income producing retirement investment .  Depending on the direction of the company after the sale, the real estate owner may have a guaranteed tenant that they know well (i.e. their previous company’s new ownership).

 

There are also disadvantages to ownership and these should be weighed before making a decision to purchase rather than lease. The initial cash down payment to acquire a property is cash that could otherwise be used to fund the growth of the business.

Financing commercial real estate requires strong financial statements for the business and often requires the personal guarantee of one or more of the partners. Also, the addition of long-term debt on the balance sheet can make it difficult for some businesses to qualify for additional financing down the road.  One way to counteract that is to take title in a real estate holding company and lease the property back to the business.

Every business’ situation is unique. Part II of our series will examine the advantages and disadvantages in leasing a commercial property.

Call Barbara today and she’ll assist you in assessing what’s right for your business and will design a strategy for you that will be a long term solution, not just a quick fix.

Barbara Hunter

Senior Vice President Regents Bank

1921 Palomar Oaks Way, Suite 100 Carlsbad, CA 92008

Telephone: (760) 931-5140

bhunter@regentsbank.com

NMLS #744785

screen-shot-2016-09-28-at-7-28-21-pm