The 504 Report - September 2006

Current Rates
September Bond Sale Rate: 6.616% (20 year fixed rate)
	Compared to the increases in the Prime Rate, 504 rates have risen only slightly over the last 12 months. A 20 year rate just above 6.5% is a great deal for your customer!
	2005 Annual Meeting

	Click on image for larger graphic of comparison.

BFG Annual Meeting

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Don’t forget to come to our Annual Meeting on Thursday, Oct. 5th from 4 pm till 7 pm at the Atrium at Meadowlark Gardens. Our top banks and bankers will be receiving awards, and it’s a great opportunity to reconnect with all your old banking friends. Contact us for directions and to RSVP.

504 Success Stories

We are in the process of preparing our Annual Economic Development Report for 2006. If you would like to suggest a successful 504 borrower (preferably one who’s 504 loan has been closed for a year), we would be pleased to consider featuring them in our Report that will be circulated to economic development professionals, Congressional representatives, and others interested in promoting economic development.

504 Marketing Tip

Getting assistance from Business Finance Group in the early stages of a project can simplify the 504 process for you and your customer. We will be happy to work with you to assure that your client’s business and project are eligible!

Bankers are often concerned about the fees associated with the bond sale process. If calculating the interest rate on an APR basis, the fees would only add 20 basis points to the rate – 6.8% is still a great 20 year fixed rate and a good deal for your customer! Additionally, the costs are financed and are not out-of-pocket to the borrower.

Our loan officers can help your customer understand how the rates and fees work, and we do so as part of the process of full disclosure. Don’t hesitate to contact us to review the costs with your customer!

Federal Bank Regulators and Commercial Real Estate Loans

A recent Wall Street Journal article outlined regulatory concerns over what they view as excessive commercial real estate lending. With 16% growth in this sector, the Federal Reserve has proposed new guidelines to temper lending. Banking groups are concerned given the health of their portfolios. We would be happy to provide copies of the article to anyone who missed it.

As a reminder, 504 can help you make the project work for your customer while reducing risk and avoiding regulatory concerns. With 50% loan to value, you can satisfy CRA requirements while maintaining a lower risk loan in your portfolio. Additionally, the bank’s first trust loan can be sold at a premium without jeopardizing your customer relationship if concentrations become an issue. We are happy to provide you with the names of several sources.