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Show Me The Non-Traditional Money

Show Me The Non-Traditional Money. SBA Loans. Presentation Outline . 7a vs. 504 Recent SBA Program Enhancements Possible Enhancements on the Horizon. 7a-Purpose is Access to Unavailable Capital Working Capital Lines of Credit Purchase Goodwill Inventory Equipment Real Estate.

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Show Me The Non-Traditional Money

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  1. Show Me The Non-Traditional Money SBA Loans

  2. Presentation Outline • 7a vs. 504 • Recent SBA Program Enhancements • Possible Enhancements on the Horizon

  3. 7a-Purpose is Access to Unavailable Capital Working Capital Lines of Credit Purchase Goodwill Inventory Equipment Real Estate 504-Purpose is Economic Development Land Acquisition and Improvements Construction of Building Purchase of Existing Building and Improvements Renovation and Restoration Equipment 7a vs. 504- What Can Each Loan Program Do?

  4. Prime Candidates for a 504 Loan • Own Property; now ready to build their own facility • Now leasing with an option to purchase • Now own; need to remodel, expand, renovate • Ready to buy property and build • Looking to expand in to new markets; adding a new site. • Need to purchase equipment.

  5. 504- How Does It Work? • CDC, that’s us, participates with a lender in order to provide a borrower with fixed, below market financing. • Bank or Credit Union lends a portion (typically 50%) • We lend a portion (typically 30-40%) • The borrower contributes a portion as well (typically 10-20%) • 20 year fixed rate • Below market rates on CDC portion (Currently 5.79%)

  6. Recent SBA Program Enhancements-American Recovery and Reinvestment Act • Temporarily eliminate two of the programs fees • 3rd Party Participation Fee—0.5% • CDC Loan Origination Fee—1.5% • Allow refinance, but only if there is also an expansion

  7. 504 Loans Approved With SBA Enhancements in 2009 • 18 Loans in Southern Utah • Lender $13,945,000 • CDC $9,899,000 • Investment $4,253,000 • 205 jobs to be created • 504 Fees Waived by SBA $218,209 • Fee Waiver should sunset in February 2010

  8. Other Enhancements—Green Incentives • Reduce energy consumption by 10% • Renewable energy/fuel production • Satisfying one of these SBA goals will allow you to increase the amount you can borrower from SBA from $1.5MM to $4.0MM • Sustainable Design-LEED Certified Building • Satisfying this SBA goal will allow you to increase the amount you can borrower from SBA from $1.5MM to $2.0MM

  9. Possible Enhancements on the Horizon • Additional funds to continue fee waivers • Expanded refinance opportunities • Increase 504 loan amounts to $5MM

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