3. It is the Small Business Administration’s
“economic development financing
program”
For expanding small businesses to aid in job creation
Guaranteed by the Federal Government
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4. Is working capital important to the success of
your client’s business?
Is it important for your client to increase cash
flow?
Is a low down payment important to your
client?
Is real estate devaluation protection important
to your client?
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5. Financing for a fixed asset project with only 10% injection…
conserves working capital for your client
Long-term, fixed rate funds…enhances cash flow for your client
MVEDC’s effective rate as of November, 2012 is:
4.171% on a 20-year debenture!
3.520% on a 10-year debenture!
Structure the deal to include soft costs, equipment and
furniture and fixtures in a real estate project…enabling your
client to minimize out of pocket expenses and preserve cash
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6. Bank exposure reduced…maximum risk 50%
Collateral aligns with appraisal...enhances LTV
90% financing for project…typically 75%
Wrap soft costs into loan…amortized over loan
Projection underwriting…fund start-ups
Bank bridge on construction…bank fee & interest
Secondary sale of 1st is >par…bank gains on sale
CDC’s do the paperwork …<work for bank & client
7. Make The Deal Happen With a 504!
504’s LOANS can go as high to $5,500,000
and can be used for:
•Purchasing land and constructing new buildings
•Purchasing or renovating existing buildings
•Acquiring and Installing machinery and equipment
•Paying soft costs of your project
Conventional Financing 504 Program Financing
Borrower Contribution Borrower Contribution
Conventional Lender SBA 504
Conventional Lender
Contact a CDC for your financing needs!
8.
9.
10. Goldman Sachs Has committed $300 million
nationally through a combination of lending
and philanthropic support to Community
Development Financial Institutions (CDFIs) and
other local community-based lenders.
11. Rolled out in 2011—20 CA Lenders in US
Allows for SBA 7-A to wrap Community
Advantage Lender’s loan
Opens mature secondary market for
Community Lenders
12. Percent of Guarantee Maximums
Greater than $10 MM – 60%
$5MM - $10MM – 70%
≤ $5MM – 80%
13. Innovative 2011 Pilot Program
Borrow up to $1MM from SBA
Lend to bank-declined borrowers