This project was best fit under the SBA 7a program. In most cases when future projection of revenue is used to qualify a loan, the government guaranteed programs such as the SBA or the USDA are the most suitable loan programs to use. One of the major requirements of an SBA loan is the proof of equity. Most often, buyers scramble to put together the equity from a number of accounts without thinking of the seasonality required by the SBA which states that the funds used as equity should have been in the account for 3 months. The proof needed is three last consecutive statements showing the balance of that account not falling in any single day below the amount of equity being used from that account. As an example, if the borrower is using $100,000 from one of the accounts to wire to escrow as part of the downpayment, the balance in that account could not have dropped under the $100,000 on any day in the past three statements. The challenge in case of a lease to purchase is that the lease has started in the past with the lessee unaware of the SBA requirements. Since the lease’s non-refundable deposit is applied to the downpayment at the time of exercising the lease to purchase option, it is a major task for Scientific Capital to organize and provide proof of all sources of funds used at the time of the lease and to qualify the project for the SBA.

UPDATE: Refinance of the SBA 7a loan with Conventional loan

In 2025 Scientific Capital refinanced this SBA 7(a) loan with a conventional loan at fixed rate of 7% and 25 year amortization to achieve two purposes: 

1. To transfer 75% of the ownership to other new partners which required extensive interaction with Marriott to amend the franchise agreement
2. To benefit from a much improved cashflow when the rate drops from 9.25% to 7%