Press: TMC sees big jump in SBA-backed real estate loans
As published in the San Francisco Business Times by Mark Calvey on Monday, November 15, 2010:
TMC sees big jump in SBA-backed real estate loans
San Francisco-based TMC Development saw a 68 percent increase in the volume of lending it helped facilitate through the SBA’s 504 loan program. TMC said it helped provide Small Business Administration-backed financing of $184.83 million for 220 small businesses to finance real estate purchases in TMC’s fiscal year that ended Sept. 30.
TMC’s figures stand in sharp contrast to 504 lending across the country. Nationally, SBA 504 lending fell 16 percent in terms of dollar-volume of loans and rose 18.5 percent in number of loans made.
With many small businesses having trouble qualifying for commercial mortgages, SBA loans have become a popular tool for financing commercial real estate purchases. In an important development, a new law allows the SBA program to be used to refinance commercial mortgages, in some cases.
“We have experienced a sharp increase in loan demand,” said Barbara Morrison, founder and president of TMC, which saw a 45 percent increase in the number of businesses it helped secure SBA 504 loans from a year earlier.
“Smart entrepreneurs are capitalizing on historically low current interest rates and attractive real estate values to purchase new buildings for their businesses,” Morrison said.
TMC has been one of the nation’s top five certified development companies for more than a decade.
TMC and other certified development companies help arrange SBA 504 financings. TMC was the top SBA lender in Northern California and for the first time is also number one in Las Vegas.
Federal legislation signed into law last September allows the SBA to make bigger loans to larger businesses. The legislation also allowed the SBA 504 program to be used to refinance qualifying, owner-occupied commercial real estate loans. Some business owners are finding their commercial mortgages are coming due and the falling value of their buildings no longer support traditional bank financing.
TMC Development and its counterparts are trying to get the word out on the SBA’s expanded offerings.
“Today, virtually any privately held company can be eligible for SBA financing,” Morrison said. “SBA can finance commercial real estate purchases in excess of $20 million.
She anticipates the SBA will issue rules and regulations on making these larger loans in the first quarter of 2011. Morrison also anticipates a learning curve among middle-market bankers, who previously considered their clients too large to qualify for traditional SBA loans under the 504 program.
“For the first time ever, middle-market companies have access to the lower rates and attractive terms of SBA financing to grow their businesses,” Morrison said.