Current Rates August Bond Sale Rate: 6.668% (20 year fixed rate) Rates are stable in spite of the market turmoil due to the quality of the 504 product for investors. The SBA guarantee adds significant value and helps hold spreads at very reasonable levels compared to other commercial mortgage backed securities. While our bond traders are cautious about the overall market, they are confident that with the large pool of buyers for our product as well as the high quality and low risk of the product, we will continue to sell at very competitive spreads.

Article Available on Appraisal and Environmental Standards for SBA Lending   Home 2007 Archives   August   July   June   May   April   March   January 2006 Archives   December   November   October   September   August   June   February   January 2005 Archives   November     Michele Courneya and James Overton collaborated on an article for the NAGGL (National Association of Government Guaranteed Lenders) Newsletter. Michele is a highly respected attorney currently practicing with Starfield & Smith and was previously SBA District Counsel heavily involved in national policy issues including closings, authorization development, and the franchise registry. Jim Overton heads up the 504 program for Self Help Ventures in North Carolina and served a 6 year term as our trade association’s Chair of Regulatory Affairs. The article addresses SBA policies and provides tips for appraisal and environmental requirements. If you would like to receive an electronic copy, please e-mail us at eshaw@businessfinancegroup.org Just a reminder – it’s taking two or more weeks to process appraisal and environmental reports through the Sacramento Loan Processing Center. Please send them in as soon as possible so that we won’t delay the bank funding! Closing Tip SBA requires that we verify how the project funds were spent as well as document that the required equity contribution was injected into the project. If the project includes costs other than the acquisition of real estate and the bank disburses all of the funds to the borrower at the bank settlement, then we must go to the borrower to document the expenditures. Sometimes, the borrower doesn’t spend all of the funds on the project, and while the bank has advanced all the money, we are not able to document sufficient project costs to allow the full funding of the 504 loan. For instance, if the borrower spends the renovation money on a new truck, we will have a problem funding the full loan amount. How can you avoid this problem? Escrow any renovation dollars and reimburse the borrower when invoices are produced (or jointly pay the borrower and the contractor). We are flexible about shifting costs from one budget line item to another, but the costs must be eligible under the 504 program. Call us whenever you have a question about funding project costs – we are always happy to assist!   Sales Tip       Talk to your client about the advantages of the 504 loan program. Your customer can preserve working capital by financing their expansion project with a 504 loan. Many small businesses are surprised by the impact on cash flow of the larger facility – increased taxes and insurance, utilities, and other facilities costs. The ability to finance 90% of the project, the ability to include soft costs in the project financing, and the opportunity to lock in a low, 20 year fixed rate all help your customer make that transition with more working capital available providing a more secure position for the bank as well.                 Copyright © 2007 Business Finance Group. All rights reserved.