Blog Archive

Friday, June 25, 2010

Direct SBA 504 Lender that IS LENDING!

A Guide to the SBA 504 Loan Program

 

Commercial Capital Ltd.
A Division of Nexus Financial Group
141 W. Central Ave, Suite 5
Winter Haven, FL 33880

 

COMPANY OVERVIEW

Commercial Capital Ltd. is a nationwide leader in providing SBA 504 loans to small business owners.  Since the inception of our company Commercial Capital’s primary focus has been the origination of small balance commercial real estate loans on owner occupied properties.

 

HOW CAN SBA 504 LOAN PROCEEDS BE USED?

  • To purchase and improve commercial and industrial property
  • To cover ALL loan costs
  • To buy and install machinery and equipment

 

QUALIFYING FOR AN SBA 504 LOAN

Since 99% of all U.S. business meet the SBA definition of a small business, chances are excellent that most of your clients will too.  To qualify for a SBA loan, the business must be:

  • Owner-operated
  • For Profit
  • Organized as a sole proprietorship; corporation; partnership or LLC
  • Have a business net worth below $8.5 million and a 2-year average net profit after taxes below $3 million in the last two operating years

THE SBA 504 LOAN STRUCTURE

Sample Project

PurchaseLandand Building……………………………………………………………………………………..   $2,000,000

Tenant Improvements……………………………………………………………………………………………...    $   300,000

Total Project Cost……………………………………………………………………………………………………..   $2,300,000

 

Sample Financing

                                                                          Adjustable                                  Monthly

                                          Amount (1)            %         Rate (2)                                                 Term (3)                       Payment

Bank 1st TD Loan               $1,150,000      50%     5.75%              25-Years          $7,235

SBA 2nd TD Loan                $   920,000      40%     5.30%              20-Years          $6,225

Borrower                            $   230,000      10%         -                             -                   -   

Total Financing                $2,300,000      100%                                                   $13,460

(1)     Loan amounts and down payment vary with project type and credit quality.  504 loan maximums are $2.0 million for regular loans, $2.5 million for public policy loans and $4 million for small manufacturers, so projects up to $10 million make good candidates.

(2)     Bank rates vary.  The 504 rate is set at funding and closely aligned to the U.S. Treasury securities.

(3)     Bank loan is a 20-25 year fully amortized loan.  The 504 loan is a 20 year fully amortized loan, payments are estimated.

KEY ADVANTAGES OF SBA 504 LOANS OVER TRADITIONAL BUSINESS LOANS

  • Lower Down Payment Requirements – Higher loan to value ratios allowed by 504 loans make qualifying easier.  You can borrow up to 90% of your financing needs, thus preserving cash. 
  • Longer Repayment Terms – SBA repayment periods are longer than those of a conventional bank, making your monthly loan payment more affordable and helping to improve you cash flow.
  • Projected Income Consideration – Most SBA lenders consider the projected income of a business, not just historical cash flows.  This is an advantage if your business is growing.
  • Secondary Source of Payment Less Critical – Due to SBA 504 loan guarantee, collateral may be less critical in loan qualification decisions.

                                                                                                           

FOR MORE INFORMATION CALL

Tony DeCresie

loans@commerciallendingpros.com

Ph 863-298-8900

Fax 863-877-4456

Cliclk Here for a Loan Submission Form 

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