Press: Own the Business? Own the Building

August 5th, 2010

Press: Own the Business? Own the Building

As published in the San Francisco Business Times, Friday, July 30th, 2010.

Own the Business? Own the Building

SBA financing for small AND large building purchases.

By Barbara Morrison, TMC

Did you know that SBA financing isn’t just for small buildings? There is no limit to the size of the building purchase with SBA 504 financing. Under a new, energy-related program recently announced by SBA, the 504 program is able to finance significantly larger projects, such as the $22.2 million purchase below. Any building purchase resulting in at least at 10% reduction in energy usage may qualify for increased SBA 504 loan funds. Businesses which will generate renewable energy in the new building may also qualify. Companies with substantial space needs can now reap the benefits of SBA 504 financing.

Did you know a business can have more than one SBA 504 loan? With the new, higher loan limits, many existing SBA borrowers are eligible for additional loans.

Did you know that you can purchase a building for your business for as little as 10% down? SBA 504 financing allows business owners to preserve working capital for continued growth and expansion by contributing just 10% of the project cost.

Did you know that SBA loans provide below market, FIXED rate financing for 20 years? SBA 504 loans have long, 20-year terms providing businesses with stabilized occupancy costs. Healthy businesses who want to move from renting to owning or wish to expand into a larger space can take advantage of the current historically low interest rates. Today’s SBA 504 rate is 5.08% – fixed for the entire 20-year term of the loan.

Did you know most privately held companies are eligible for the SBA 504 loan program? The SBA 504 program was created specifically to provide business owners with funds to purchase, renovate or construct commercial property for the company’s use. While the business must meet certain size standards, generally most privately held companies with fewer than 500 employees are eligible by SBA size standards.

What is a CDC? SBA structured the SBA 504 loan program as a partnership between a Certified Development Company (CDC), such as TMC, and a qualified lender. A CDC is a private corporation that is certified and regulated by SBA to make SBA 504 loans in a specific geographic area. The CDC assists businesses in obtaining 504 financing and acts as an advocate throughout the loan process. A CDC must process all SBA 504 loan applications. After the loan funds, the CDC services the loan for the next 20 years.

TMC is certified to provide SBA 504 financing for projects throughout California and southern Nevada. Ranked in the top 5 CDCs nationwide for more than a decade, TMC staff works directly with borrowers to tailor financing packages that meet SBA program guidelines and the credit capacity of each business. In the last 28 years TMC has provided over $5 billion in SBA 504 financing for over 3,400 businesses. A complete pre-qualification, free of charge, is available for prospective borrowers who are interested in taking advantage of SBA’s long-term, FIXED rate financing.

California businesses are utilizing the SBA 504 loan program in increasing numbers to take advantage of historically low interest rates and current property values.

TMC has seen a 97% increase in the amount of SBA loan financing in 2010 over last year.*

*Based on loans approved in the first 6 months of 2010 compared to the same period in 2009.

Barbara Morrison is President and Founder of TMC.