Home
>
Small Business
>
The SBAs Savviest Program

The SBAs Savviest Program

Forget everything you've ever heard about the U.S. Small Business Administration (SBA). The negative connotations may have been warranted in the past, but the SBA is different these days. The SBA is worth every penny of its more than $22 billion budget on the basis of a single program alone: the SBA 504 Loan Program for small business owners who want to acquire or develop their own facilities.

In fact, SBA 504 loans may rank as one of the most effective domestic economic development programs the federal government administers.

Lots of entrepreneurs ?? and far too many bankers, ironically ?? dismiss the SBA on the basis of its 7(a) lending program that always seems to need supplemental appropriations by the U.S. Congress.

The 7(a)'s reputation may or may not be deserved, but some of its negativity has managed to soil other truly effective SBA programs.

SBA 504 loans, by contrast, are a dynamo. They work; they work well; and unfortunately by some of the historical problems in the SBA's 7(a) program, a dark shadow has been cast over 504 loans causing not many people to know about them.

In fact, for too long, I have heard many otherwise knowledgeable lenders dismiss SBA 504 loans based on faulty and out-dated information.

I've been providing SBA 504 loans for more than eight years. Over two years ago, I founded Mercantile Commercial Capital, LLC to focus exclusively on providing 504 loans, and we're still the only lender nationwide to primarily do this. To date, we've closed more than 60 loans worth a total of more than $67 million in only 30 months of business. We offer other financing options too, but SBA 504 loans are by far our most popular and most rewarding program.

So far, every qualified 504 loan proposal we have submitted to the SBA has been approved and funded, or is soon to be funded.

The SBA knows the 504 is a hot property. Funding has grown about 22 percent a year since 2000. Last year, 504 loans helped fuel about $10 billion in total capital investments for 8,000 small businesses throughout the U.S. In fact, these loans helped create about 75,000 new jobs last year through the "equity savings" small business owners experienced.

Entrepreneurs, real estate brokers and accountants are gradually waking up to the fact that 504 loans were designed to level the playing field for small businesses in the marketplace. With 90% loan-to-cost financing of most commercial real estate projects, 504 loans are very powerful.

For the borrower, SBA 504 loans offer long-term, below-market, fixed-rate financing at better terms than are available from any private sector lender. And if that wasn't good enough, borrowers generally put half as much money down for 504 loans, which enable them to grow their businesses a lot faster. For every $50,000 of SBA guaranteed funds, small business owners need to create or retain one job in the next two years. It is in this way that 504 loans have become an engine for economic growth in America.

Lending amounts are generally not capped or limited and only non-public, for-profit businesses qualify. Three financial qualifications, however, set some limits: the borrower's small business must have a tangible net worth under $7 million; the operating company's net income for the previous two years must average less than $2.5 million annually; and the borrower cannot have liquid, non-retirement assets greater than the total project amount.

Most small businesses have no trouble meeting these qualifications. In fact, over 98 percent of all businesses in Florida, for example, qualify for SBA 504 loans.

What sorts of businesses make the most appropriate SBA 504 loan candidates? We see an extraordinary number of service professionals (physicians, attorneys, accountants, etc.), and we also finance plenty of franchisees, manufacturers and distributors. But in truth, any business with a track record or at least some solid, related experience is an appropriate SBA 504 loan candidate. The 504 Loan Program collateral requirements are generally limited to the commercial real estate facility that the loan finances, and approvals and closings happen in days and weeks, not in multiple-months as it was in the past.

Historically, the SBA was usually considered a lender of last resort. But compared to ordinary commercial financing, 504 loan terms and conditions are so good that for almost every small business, an SBA 504 loan should rank as their top choice.

Bankers have any number of reasons they've dreamed-up why not to consider SBA 504 financing and, to be candid, I'm okay with that. It just means we'll be here to help a lot more small businesses grow with our focus on the SBA's savviest program: 504 loans.

* * *

www.mercantilecc.com

Chris Hurn is President and Chief Executive Officer at Mercantile Commercial Capital, LLC, a leading provider of SBA 504 loans for business owners.

Chris actively participates in, among other things, the business development, underwriting and marketing functions of MCC. Previously, he worked as a senior management consultant, financier and executive with companies such as GE Capital, Heller Financial and NAI Realvest Partners. He has advised, financed and helped many small to mid-sized businesses throughout Florida and the Northeast for over ten years.

limousine Ackley .. Lockport Chicago limo O’Hare

In The News:

A virtual private network can help ensure your information remains security and your privacy remains intact. Kurt the CyberGuy explains.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Artificial intelligence-based cameras are giving air defense operators unprecedented capabilities in monitoring and protecting airspace.

Apple's iOS 18.1 Inactivity Reboot automatically reboots your iPhone if it hasn't been used or unlocked for more than three days, providing better data protection.

An inventor designed rooftop solar panels for a Tesla that draws solar energy while the car is parked, adding travel mileage without plugging in.

There are currently no laws governing what artificial intelligence can and cannot do with the information it gathers; here are 10 things to avoid telling AI chatbots to keep yourself safe.

A credit union with over 240,000 members recently revealed it was targeted by cybercriminals, resulting in a data breach that was part of a two-month attack by hackers.

Scammers have become skilled at creating convincing fake websites that can easily fool unsuspecting users. The CyberGuy offers tips to protect yourself.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

CAPTCHAs, which are used by websites to confirm whether users are people or bots, are harmless, but hackers are using them to infect PCs with malware.

Hackers recently leaked personal information of about 500,000 Americans and stole patient medical records that included lab results and insurance details.

The holiday season sees a rise in mobile shopping scams. Tech expert Kurt “CyberGuy" Knutsson helps you learn how to stay safe.

Tech expert Kurt “CyberGuy" Knutsson says a VPN enhances online banking security by encrypting data and protecting privacy.

Beware of these six sneaky holiday scams. Tech expert Kurt “CyberGuy" Knutsson gives you tips to avoid falling victim.

Tech expert Kurt “CyberGuy" Knutsson reveals how to securely back up and factory reset your Android to protect your privacy and data.

Artificial intelligence is making life easier for cybercriminals, allowing them to create elaborate scams to trick people. Kurt the Cyberguy explains how to protect yourself.

Cut through all the digital clutter and delete multiple emails from your Android simultaneously. Kurt the CyberGuy explains how it's done.

Tips to prevent your holiday decorations from being stolen

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Kurt "CyberGuy" Knutsson lays out the immediate steps you should take if your phone has been hacked and your personal information becomes vulnerable.

Fraudsters are sending people bogus invoices through PayPal as part of a sneaky scam that is going around; here's how to protect yourself from being fooled.

A former Colgate-Palmolive employee was shocked to discover $750,000 had been drained from her 401(k) account. "CyberGuy" offers tips on how to prevent identity theft.

Electric vehicle maker Harbinger recently showed its electric delivery truck can handle icy roads with agility and stability in winter.

To make the busiest time of year more manageable, here are some tricks for tracking your packages, taking quality family photos and curating the perfect Christmas playlist.

Kurt "CyberGuy" Knutsson explains how to keep your online Amazon gift purchases a secret from loved ones or friends this holiday season.