For the first time in nearly a year, the SBA 504 20-year and 25-year rates edged slightly higher over the previous month. The previous declines resulted in record low rates for the program. While September’s rate might indicate a bottoming out of rates, the spread between Prime and the 504 is still significant, so there’s…
I’ve spoken with several lenders over the past couple of months and one topic that has been mentioned recently is: Options. Small business owners are becoming more knowledgeable when it comes to financing for their business and are also being more aggressive in seeking out the best deal from competing lenders. For those who just…
When financing owner-occupied commercial real estate, many small businesses secure long-term financing through their bank. While their payments are usually based off of a 20-year amortization, the actual term (length) of the loan might be less, resulting in a balloon payment (a larger-than-usual one-time payment at the end of the term of the loan). Depending…
For those familiar with SBA 504 financing, the type of borrower that would most likely come to mind that would qualify for a 504 loan would be a manufacturer or a service-related business. However, SBA 504 loans can be used to finance agricultural enterprises as well. This blog talks about how an SBA 504 loan…
When it comes to SBA financing for small to medium sized businesses, most lenders are at least a little familiar with the SBA 7a guaranty program. However, most are not familiar with the SBA 504 loan program. Not having knowledge of this beneficial loan program puts your lending institution and your borrower at a disadvantage…
Happy New Year everyone! I’m starting out 2016 with an unconventional method of financing an SBA 504 deal – using a non-bank lender for the 50% portion of the project. While traditionally the Third Party Lender, or participating lender alongside the SBA 504 loan, is a community, regional, or national bank, using a non-bank lender…
We here at SEDA-COG and our lending partners want to see small businesses grow and succeed. Our SBA 504 loan program is the perfect fit for this and builds partnerships within our community. Some lenders may view the SBA 504 program as a competitor in the lending marketplace, but banks are an important and valued…
Unlike most commercial loans, where funds are disbursed at settlement, SBA 504 loans act differently. The primary reason is that SBA 504 loans are packaged into a bond offering and sold to investors and the proceeds of the bond sale is what provides the money for the loans. Therefore, there is a delay between closing…
One of the eligible uses of SBA 504 funds is to finance leasehold improvements. While a leasehold improvement project is harder to do versus other real estate needs such as a building acquisition, construction, or renovation, they can be done given the right circumstances. This week’s blog discusses the underwriting criteria needed for financing a…
One popular type of business, especially for retired vets looking to start their own business, is a franchise. A franchise offers pre-opening and ongoing support to the franchisee and typically involves an established product or service that may already enjoy brand-name recognition. But in dealing with a franchised business, the SBA needs to review the…
