The 504 Report - May 2007

Current Rates
May Bond Sale Rate: 6.197% (20 year fixed rate)
	A very low 20 year fixed rate can make the project affordable for your customer!
	504 vs Prime

	Click on image for larger graphic of comparison.

Age of Appraisal and Environmental Reports

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The SBA’s Centralized 504 Processing Office is requiring that all appraisal and environmental reports be no more than one year old at the time of submission to SBA. Previously, we were allowed to submit reports based on the application date, but with this change, it is imperative that we receive these reports quickly. Please don’t hold the reports until the construction or renovation work is complete!

As a reminder, environmental reports must be addressed to Business Finance Group and the SBA.

Marketing Tip

The commercial sales market appears to be heating up. When presenting the 504 loan to your customer, how do you sell the loan program?

  ~ Up to 90% financing to help preserve working capital
  ~ 20 year, below market fixed rate reduces occupancy costs
  ~ Financing package can include both hard and soft costs
     reducing out-of-pocket costs
  ~ Low LTV may allow bank to be more competitive on rates and
     terms

Inc. Magazine Article "Does the SBA Still Matter?"

The article begins its story with a Hampton Roads business that grew successfully with the help of a 504 loan. It demonstrates that SBA does indeed provide assistance to those small entrepreneurs who most need some form of assistance whether it is technical assistance, government contracting assistance, a micro loan, a business loan, or a commercial mortgage. You can access the article on the web by clicking here.

Pending Legislation

The House has passed a legislative package covering all SBA programs and offering significant improvements for the 504 program. The Senate Small Business Committee is preparing to mark up S.1256 which is similar to the House bill. Should we be successful in getting the legislation passed, we will provide program updates as quickly as possible.

In the meantime, if you have new bankers or need a refresher on the 504 program, hints on how to close a 504 loan, or some marketing tips, please give us a call at 703-352-0504. We would be happy to come to a staff meeting for a presentation. We are also happy to meet one on one with any of our lending partners. Just give us a call!