Loan Closing FAQ

TMC has compiled a list of frequently asked questions to assist our clients through the loan closing process.

For additional support, please contact us.

For questions regarding changing your auto-debit account, about prepayment penalties and other servicing questions,
please see our servicing FAQ.

Who should I contact on the status of my loan?

If you do not know who your TMC contact is, please call our office at 888.989.8855 and you will be connected with your loan team.

What is the difference between SBA and Third Party Lender?

The SBA is the takeout lender and will be paying off the interim loan provided by your Third Party or Bridge Lender. TMC Financing is a Certified Development Company (CDC) certified by the SBA to package the SBA 504 Loan Program. The Third Party Lender provides the 1st mortgage on the real estate or equipment being financed.

What are the requirements to fund my SBA loan?

The SBA Loan Authorization outlines the requirements for funding your loan. If you need a copy of your authorization, please send a request to your closing officer. All documents requested by the CDC must be received and reviewed by the CDC’s closing attorney and once it has been determined that all the SBA requirements are met TMC will be in a position to submit your loan for funding.

Why do I need to provide a business license and what if my city does not issue business licenses?

SBA requires evidence that your business is legally able to operate in the location purchased through the 504 loan program. This may be a license from either the city or county, as applicable to your area and type of business.

What are the SBA requirements for insurance?

Borrower must obtain adequate insurance coverage and maintain this coverage for the life of the Loan. Refer to section E.1 Insurance Requirements in the SBA Loan Authorization.

Common insurance requirements:

Real Estate Hazard Insurance coverage on all real estate that is collateral for the loan in the amount of the full replacement cost/insurable value referenced in the appraisal. If full replacement cost insurance is not available, coverage must be for maximum insurable value.

Personal Property Hazard Insurance coverage on all equipment, fixtures or inventory that is collateral for the Loan in the amount of the full replacement cost/insurable value referenced in the appraisal. If full replacement cost insurance is not available, coverage must be for maximum insurable value.

Flood Insurance if any portion of a building that is collateral for the loan is located in a special flood hazard area. If any equipment, fixtures, or inventory that is collateral for the loan (“personal property collateral”) is in a building any portion of which is located in a special flood hazard area borrower must obtain available flood insurance for the personal property collateral. Insurance coverage must be in amounts equal to the lesser of the insurable value of the property or the maximum limit of coverage available.

What is a furniture, fixture and equipment list and why is this required?

SBA requires a list of all furniture, fixtures and equipment that will be collateral for the SBA 504 loan. Refer to section D. Collateral Conditions in the SBA Loan Authorization. This list will be attached to the UCC or fixture filing in the county of your property. For your convenience, feel free to use this template. All furniture, fixtures and equipment that are collateral for the loan must be provided on this list and for any items with a value of $5,000 or more a serial number is also required (when available).

When/where will I sign my SBA loan documents?

Once loan documents have been prepared they are typically sent to escrow for your signature. The escrow officer will contact you to schedule signing. If you require specific accommodations, please let your closing officer know as soon as possible.

Why do my loan documents not have an interest rate or payment information on the Note?

Because of the timing of the bond sale, your interest rate is not determined until the week of funding. Once that information is available, our Servicing Department will send you your rate and payment information.

What do the SBA loan fees consist of? Can I pay them upfront or do they have to be financed?

The 504 loan fees consist of the guarantee fee, funding fee, processing or packaging fee, closing costs, and the underwriter’s fee. To see a breakdown for your loan, refer to section B. Project Financing in the SBA Loan Authorization. These fees are also outlined in your TMC Assistance Agreement. The only fees that can be paid upfront are the processing fee and the Closing costs. Please contact your closing officer to arrange payment of these fees outside of your SBA 504 loan.

What are the interest rate, payment amount, and amortization schedule? Who should I contact for this?

Once the SBA loan funds, our Servicing Department will provide you with your rate, payment amount and amortization schedule. The first payment date is first business day of the month.

Can I lock in my interest rate?

The interest rate is based on a bond sale and is loosely tied to the 5- or 10-year U.S. Treasury sales rates. Your rate is locked on the date of funding and is fixed for the term of your loan. The rate cannot be locked in prior to funding. Please see the historical rate chart to see how SBA 504 rates tend to trend below market fixed-rates.

Why did I get a check from Wells Fargo Bank?

SBA rounds the Gross SBA Loan Debenture Amount to the next thousand. Once your loan funds, the balance to borrower is refunded to you by Wells Fargo who is the SBA Central Servicing Agent (CSA). Gross Debenture – (Net debenture proceeds + Administrative costs ) = Balance to borrower. Reference section B. Project Financing in the SBA Loan Authorization for the breakdown or call your closing officer for guidance on this information.

When do I get my deposit back? How much was my deposit?

After your loan funds, your deposit refund will be processed within six weeks. Once your account has been billed with all incidentals (please review your TMC Assistance Agreement regarding deposits), the remaining deposit, if any, will be mailed to you from TMC Financing.

What are my options for the payment plans?

Payments are due on the first business day of the month by automatic debit from your preferred bank account. Your first auto-debit will occur on the first business day of the month after your loan funds from the account you provided at closing. SBA requires payment be set up as auto-debit. There are no exceptions.

What if I want another SBA loan?

You may be eligible for additional SBA 504 financing. Many of TMC’s clients receive two or more loans to finance their growing businesses. Please contact us to find out if you are eligible for additional SBA 504 financing.

Construction projects: If I am financing improvements with loan proceeds, what are the requirements? What is the construction process and how does it work?

We will need your active assistance to complete the process once your project is near to completion.

  • Inform us when your project is about 30 days from completion, or have your lender let us know. Around that time, we will send you a letter outlining exactly what we will need to close your SBA loan.
  •  The conditions outlined in the SBA 504 Loan Authorization must be met. View the key SBA 504 loan construction requirements here
  • Your construction lender must provide confirmation to TMC that construction is complete and all funds have been disbursed, so that we can verify the final project costs.
  • Notice of Completion must be filed. Timeliness of this filing is important because TMC must allow all mechanics liens to be cleared for your contractors or subcontractors.
  • You must provide TMC with updated financial information in order to verify that your financial condition has not changed substantially since the time that you applied for your SBA loan.
  • You must sign your SBA loan documents and pay any escrow/title charges incurred.
  • Fully executed loan documents will be submitted to the SBA District Office for final approval to fund. Your SBA 504 loan will fund approximately one month later.

Construction projects: Who is monitoring the progress of my construction?

Your construction lender will be monitoring the progress of your project. TMC will also be tracking the status of construction, estimated completion date, and the status on fund disbursement to the contractors in cooperation with your construction lender.

Construction projects: What is a Notice of Completion and how is the filing handled?

The Notice of Completion is written notice issued by the owner of a project or general contractor to notify concerned parties that all work on the project has been completed. This notice also sets the period within which concerned parties may exercise their lien rights. You can send the Notice of Completion directly to the escrow officer who will handle recording or you can go to the county recorder’s office directly.

View California Notice of Completion
View Nevada Notice of Completion