sced 504 brochure
TRANSCRIPT
1) Lower Down Payment RequirementsHigher loan-to-value ratios allowed by SCED 504 loans make qualifying easier. You can borrow up to 90% of your financing needs, thus preserving valuable cash.
2) Below Market Interest RatesYour business can save on interest expenses by NOT accepting market interest rates when below market rates are available to you.
3) Longer Loan AmortizationsLonger loan amortizations allow for smaller monthly repayments, lowering impact on cash flows.
4) Finance Closing and Soft CostsFinancing closing and other soft costs helps to keep out-of-pocket expenses to a minimum.
SBA 504 LOAN PROGRAMA Better Way To FinanceCommercial Real Estate
Superior California Economic Development (SCED) is certified by the U.S. Small Business Administration to provide low-interest financing to small business owners.
SCED has been helping small businesses in California purchase their own real estate since 1990 and has built an extensive portfolio of experience.
In addition, SCED serves as a non-traditional financing source through our Business Loan Program for existing and start-up businesses whose unique financing needs are often inadequately met by traditional lending institutions.
499 Hemsted DriveSuite ARedding, CA 96002(530) 225.2760(530) 225.2769 fax
www.scedd.org
SUPERIORCALIFORNIAECONOMICDEVELOPMENT
SUPERIORCALIFORNIAECONOMICDEVELOPMENT
SCED 504 LOANPROGRAM BENEFITS ABOUT USABOUT USSCED 504 LOANPROGRAM BENEFITS
BUSINESS TYPESUSING SCED 504LOANS
Hotels & Motels • Restaurants • Car Washes • Medical Offices • Attorney’s Offices • Automotive Repair Shops Gas Stations with Mini-Marts • Child Day Care Centers • Dental Offices Manufacturing Facilities • General Office Space • RV Parks • Warehouses
Veterinary Hospitals
BUSINESS TYPESUSING SCED 504LOANS
SUPERIORCALIFORNIAECONOMICDEVELOPMENT
SUPERIORCALIFORNIAECONOMICDEVELOPMENT
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HOW CANSBA 504 LOANPROCEEDS BE USED?
THE SBA 504LOAN STRUCTURE
•Buy,constructorimproveowner-occupiedcommercial and industrial property with MINIMAL investment.
•Purchaseorremodelanexistingbuilding.•Purchase land and construct a new building.•Tocoversoftandclosingcosts.•Purchaseprojectmachinery&equipment
99% of all U.S. businesses meet the SBA definition of a small business and chances are excellent that yours will too. In order to qualify for a SBA loan, your business must be:
•Owner-operated,forprofitentity.•Organized as a sole proprietorship;
partnership;corporation;orLLC.•Tangible business net worth cannot
exceed $8.5 million.•Businessnetincomecannotaverage
more than $3.0 million during the previous two calendar years.
•Theguarantors’/principals’personal,non-retirement, unencumbered liquid assets cannot exceed the proposedprojectsize.
PROJECT COSTS:
Purchase of Land & Building ------------------ $1,700,000
Machinery & Equipment ----------------------- 250,000
Furniture & Fixtures ---------------------------- 30,000
Soft Costs* ---------------------------------------- 20,000
TOTAL PROJECT COSTS: $2,000,000__________________________*Soft costs may include architectural fees, appraisal and environmental fees, interim bank interest and other pro-fessionalfeesassociatedwiththeproject.
LOAN TYPE 504 CONVENTIONAL
Owners Equity $200,000 $400,000
Bank Loan $1,000,000 $1,600,000
SCED 504 Loan $800,000 $0
TOTAL $2,000,000 $2,000,000
•Businesstaxreturnsfor3years•Businessfinancialstatementfor3years•Currentbusinessfinancialstatements•Personaltaxreturnsfor3years•Currentpersonalfinancialstatement
Your SCED Loan Officer can pre-qualifyyour company in 24 hours!
An established company (2+ years in business) has an opportunity to purchase its own facility. The following is a breakdown of the proposed deal:
A TYPICAL 504LOAN SCENARIO
QUALIFYING FORAN SBA 504 LOAN
Here’s what you’ll need to start:
HOW CANSBA 504 LOANPROCEEDS BE USED?
THE SBA 504LOAN STRUCTURE
A TYPICAL 504LOAN SCENARIO
Here’s what you’ll need to start:
QUALIFYING FORAN SBA 504 LOAN
SCEDFinancing
40%BankFinancing
50% CompanyCash Down
10%
CompanyCash Down
10%
BankFinancing
50%
SCEDFinancing
40%
A 504 Loan has three participants:
1) Bank Financing - Superior California Economic Development (SCED) arranges for a bank to participate for as little as 50% of the loan amount, at competitive rates and terms due to minimal exposure ontheproject.
2) SCED - SCED’s SBA 504 loan financesupto40%or$1.5million*oftheprojectwith a fixed rate for 20 years.
3) Company Cash Down - Borrower con- tributes a minimum down of at least 10%, freeing additional cash for other business purposes.
*Up to40%or$2million for theproject thatmeetsSBAgoals or 40% or $4 million for manufacturing businesses.
504 loans are structured with fully amortizing 20-year terms and carry a
lower-than-market interest rate.
www.scedd.org
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