The 504 Report - March 2008

Current Rates
March Bond Sale Rate: 6.378% (20 year fixed rate)
	As the Fed continues to drop rates, the yield curve steepens, and investors require larger spreads. Our spreads have widened to an all time high of 193 basis points over the ten year treasury due principally to economic concerns. Even though Wall Street is nervous, our product continues to be over-subscribed on a monthly basis due to a strong track record, the SBA guarantee, and an increased pool of buyers. That has kept our pricing 50 to 60 basis points lower than comparable products.

March 2008

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Liquidity Concerns?

If there are no renovations in a project, Business Finance Group can close simultaneously with the bank, reducing the length of the bridge period before the bank receives its pay down. By using the 504 program, the bank can spread its loan dollars over more borrowers while reducing its risk. Please call us to discuss how we can help!

Team BFG to walk for MS

Our employees are gearing up to walk and raise funds to help find the cure and cause for multiple sclerosis. The 20th Anniversary MS Walk will be held in Manassas on Saturday, April 5th, and we would appreciate your support!

Many of you may know that our team captain, Jenny Backus, has been living with MS, and we hope that our efforts will help many like Jenny face the challenges of this unpredictable and disabling disease, as well as help support cutting edge research. The money raised from this event will go toward 440 research projects to develop better treatments and a cure!

Please visit our team web site by clicking here. You can support our team by joining in as a walker, volunteering at the event, or making a donation to MS. Additionally, you may contact Jenny directly at jbackus@businessfinancegroup.org or at 703-667-5044 for information or assistance. Thanks for helping us support Jenny as she learns to adapt to the challenges of living with MS!

Closing Tip

Part of our mission statement is to “offer creative financing solutions for asset purchases” and we will strive to arrive at the most creative solution permitted within SBA guidelines. During the course of a project, costs often change, and we look for ways to adjust the 504 approval to fit the revised project. We have seen some challenges recently with “special use properties” or “start up businesses." SBA requires that the bank do a minimum permanent loan of 50% of the project costs for either of these types of structures. While we always like to get an early warning of project changes, it is very important that we be involved in any restructuring of a project where the borrower is required to inject a minimum of 15%. Please contact us as soon as you know there has been a change in project costs so that we can re-structure the project in accordance with SBA rules to avoid last minute problems and loan document modifications.