NEDCO has made partnering with us for an SBA 504 loan straightforward and efficient. We have streamlined the 504 loan application, approval, and closing processes to eliminate any superfluous or repetitive paperwork. All the essential forms and a loan checklist can be readily accessed on our website. The commercial loan and the SBA 504 loan share the same appraisal and environmental reports, further simplifying the process.
Our dedicated team of loan officers at NEDCO is always available to address queries from lenders and borrowers, or to discuss prospective project financing options.
Lending Benefits Galore
When it comes to the SBA 504 loan, commercial lenders benefit from the first lien position and typically, a 50% loan-to-value ratio, thereby significantly mitigating collateral risk. For smaller financial institutions, the program opens doors to involvement in larger-scale projects, while larger lenders can curb exposure to a specific industry and/or borrower. This loan program allows lenders to extend their lending capacity across more borrowers, diversify default risk, and minimize losses in the event of a default. Generally, the SBA can claim its collateral only after the first mortgage lender has been fully repaid.
In certain projects, banks participating in the SBA 504 loans may qualify for Community Reinvestment Act (CRA) credits.
The SBA 504 loan is designed specifically to facilitate the expansion of companies. Business owners investing in a permanent facility, machinery, equipment, or other capital assets often embark on their most significant business-related investment. As such, an SBA 504 loan frequently serves as the foundation of a comprehensive banking relationship.
To learn more about our lending program, we invite you to contact us and schedule a free Lender Training seminar for your Commercial Lending Department. During this seminar, we will delve into the specifics of the SBA 504 Loan Program, any recent changes to the program, and the numerous advantages it offers to lenders and their small business customers.