(Add to Favorites | View All Articles | Resource Directory)
|
|
|
The SBAs Savviest Program
Forget everything you've ever heard about the U.S. Small Business Administration (SBA). The negative connotations may have been warranted in the past, but the SBA is different these days. The SBA is worth every penny of its more than $22 billion budget on the basis of a single program alone: the SBA 504 Loan Program for small business owners who want to acquire or develop their own facilities. In fact, SBA 504 loans may rank as one of the most effective domestic economic development programs the federal government administers. Lots of entrepreneurs -- and far too many bankers, ironically -- dismiss the SBA on the basis of its 7(a) lending program that always seems to need supplemental appropriations by the U.S. Congress. The 7(a)'s reputation may or may not be deserved, but some of its negativity has managed to soil other truly effective SBA programs. SBA 504 loans, by contrast, are a dynamo. They work; they work well; and unfortunately by some of the historical problems in the SBA's 7(a) program, a dark shadow has been cast over 504 loans causing not many people to know about them. In fact, for too long, I have heard many otherwise knowledgeable lenders dismiss SBA 504 loans based on faulty and out-dated information. I've been providing SBA 504 loans for more than eight years. Over two years ago, I founded Mercantile Commercial Capital, LLC to focus exclusively on providing 504 loans, and we're still the only lender nationwide to primarily do this. To date, we've closed more than 60 loans worth a total of more than $67 million in only 30 months of business. We offer other financing options too, but SBA 504 loans are by far our most popular and most rewarding program. So far, every qualified 504 loan proposal we have submitted to the SBA has been approved and funded, or is soon to be funded. The SBA knows the 504 is a hot property. Funding has grown about 22 percent a year since 2000. Last year, 504 loans helped fuel about $10 billion in total capital investments for 8,000 small businesses throughout the U.S. In fact, these loans helped create about 75,000 new jobs last year through the "equity savings" small business owners experienced. Entrepreneurs, real estate brokers and accountants are gradually waking up to the fact that 504 loans were designed to level the playing field for small businesses in the marketplace. With 90% loan-to-cost financing of most commercial real estate projects, 504 loans are very powerful. For the borrower, SBA 504 loans offer long-term, below-market, fixed-rate financing at better terms than are available from any private sector lender. And if that wasn't good enough, borrowers generally put half as much money down for 504 loans, which enable them to grow their businesses a lot faster. For every $50,000 of SBA guaranteed funds, small business owners need to create or retain one job in the next two years. It is in this way that 504 loans have become an engine for economic growth in America. Lending amounts are generally not capped or limited and only non-public, for-profit businesses qualify. Three financial qualifications, however, set some limits: the borrower's small business must have a tangible net worth under $7 million; the operating company's net income for the previous two years must average less than $2.5 million annually; and the borrower cannot have liquid, non-retirement assets greater than the total project amount. Most small businesses have no trouble meeting these qualifications. In fact, over 98 percent of all businesses in Florida, for example, qualify for SBA 504 loans. What sorts of businesses make the most appropriate SBA 504 loan candidates? We see an extraordinary number of service professionals (physicians, attorneys, accountants, etc.), and we also finance plenty of franchisees, manufacturers and distributors. But in truth, any business with a track record or at least some solid, related experience is an appropriate SBA 504 loan candidate. The 504 Loan Program collateral requirements are generally limited to the commercial real estate facility that the loan finances, and approvals and closings happen in days and weeks, not in multiple-months as it was in the past. Historically, the SBA was usually considered a lender of last resort. But compared to ordinary commercial financing, 504 loan terms and conditions are so good that for almost every small business, an SBA 504 loan should rank as their top choice. Bankers have any number of reasons they've dreamed-up why not to consider SBA 504 financing and, to be candid, I'm okay with that. It just means we'll be here to help a lot more small businesses grow with our focus on the SBA's savviest program: 504 loans. * * * www.mercantilecc.com Chris Hurn is President and Chief Executive Officer at Mercantile Commercial Capital, LLC, a leading provider of SBA 504 loans for business owners. Chris actively participates in, among other things, the business development, underwriting and marketing functions of MCC. Previously, he worked as a senior management consultant, financier and executive with companies such as GE Capital, Heller Financial and NAI Realvest Partners. He has advised, financed and helped many small to mid-sized businesses throughout Florida and the Northeast for over ten years.
MORE RESOURCES: News provided by Yahoo! News and Google News Online, Direct to Grow as 26% of Small Biz Ups Ad Spending - Media Buyer Planner Small Biz: New shop strives for global connection - Online Athens 26% of Small Biz Raises Ad Spend, Precipitating Online Growth - Marketing Vox News Six small biz tips from a CEO who flies right - BloggingStocks Poll: 25% of small-biz owners worry about survival - Bizjournals.com Smallbiz Brain Presents America’s Best Companies - PressReleasePoint (press release) US Celcos Urged To Create New Small-Biz Programs - Telecomweb |
|
|
|
RELATED ARTICLES
Image of Your Franchise Automotive Outlet is So Important Image of your franchise automotive outlet is so important. Some say image is everything, well then if you buy a franchise you should be constantly thinking of image and cleanliness. FTC Franchise Rule if Enacted will Trigger Hardship for Private Sector The FTC Franchise Rule maybe changed, as the Federal trade Commission has put out a report to the franchising industry as to upgrade the rule. If enacted will it will trigger hardship for private sector and cost many trees their lives; Paperwork. What Help is there for Veterans Starting a Business? Some of the very qualities that attract people to the military life are what make them good candidates for an internet based home business. What are these qualities? A sense of adventure, an attraction to signs of leadership and the ability to discern what constitutes a good leader, courage and idealism and an understanding of the joy of testing one's own limits. Hosted PBX, Is It Right For You? "Order Now!" "Your Business Will Fail If You Don't Have This New Technology!" "Your Competition Has This Tool, Why Don't You?" Does any of this sound familiar? Does it make you cringe? It seems to be impossible to keep up with all the new trends in business today. It's hard to know which trends are just flash in the pan gimmicks and which are valuable tools that your business can actually benefit from. Business Valuation is Critical What is Business Valuation? The term business valuation is the method by which the business worth is determined. This usually happens when the business is for sale, when the business is looking for extra funding from the banks, when the business is considering taking on extra investors, or where the business is looking at merging with another organisation. The Business Autopsy: A Fact Of Life Last week we discussed the importance of performing an autopsy on a dead business. No, I haven't been watching too many of those wonderfully graphic, TV forensic investigation shows. Mini-Blind Cleaning Business, Case Study Sometimes the simple businesses are the ones, which make good money. Take mini-blind cleaning for instance. Characteristics to watch for when buying a company There are no "rules of thumb" in the pursuit of companies to buy. Each purchase opportunity has to stand on its own merits. The SBAs Savviest Program Forget everything you've ever heard about the U.S. Going Public by Way of Regulation D (504) Offering Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) provides three exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC. Frodos Journey: What It Can Teach You About Marketing Your Small Business Just recently, I took a break and caught "The Return of the King" at the movie theater. At the same time, I was pondering a topic for this article. Why Small and Medium-Sized Businesses Should As the owner or an employee of a small-to medium-sized business, you might have never thought about media monitoring. Maybe you are not even sure what exactly is meant by this and have thus ignored it so far. Restaurant Operators - What Skills do you Need A tongue-in-cheek look at the skills required to operate a restaurant but?on he whole they come pretty close to the truth.People Skills, You need to be good with people, because you will have different customers almost every day, you will have repeat customers who have higher expectations, a high-maintenance shift-based staff to manage, suppliers who won't always meet your expectations or time frames and creditors who want their money now. Provide Affordable Health Care To Employees At Little To No Cost To You You can provide affordable health care plans to your employees. If you feel overwhelmed by health care plan costs, you may be able to achieve far more than you believe. Small Business Franchise Opportunities Many businesses offer small business franchise opportunities. There are many things that are needed for a small business of this kind, but the rewards are great. Is This The Way Its Always Been Done? Let's face it, we all tend to get stuck in doing things 'the way they've always been done', and creating products, or services, in a similarly conservative mode.But there is another way. How to Effectively Design Your Business Image In many industries, image is one of the last things business owner looks at. If business is not booming, they assume there is something wrong with the sales method, as opposed to the image. The Care and Feeding of Your Small Business While I was hard at work last week, an everyday drama was playing out in a hospital room in the next town. My niece was working on presenting me with a new great nephew. Franchising Industry Burdened in Over Regulation There were only an estimated 1800 active franchisors in this country at the end of 2002, that number down from 6000 in a single decade. It is not hard from this effort to increase regulations to see why. Important tips to keep your small business' computers running When working properly, computers enable small businesses to make big business profits; however, get booted off your computer and you're suddenly starving. In most instances, computers usually act up due to lack of care by its owners.
|
| home | site map | articles |
| © 2006 |