The small business administration SBA program of 504 or 504 is a program created with the aim of creating jobs. SBA 504 is a loan program that can be used by most people and businesses, but the special considerations that arise for women and minorities. SBA commercial mortgage loans are perfect for companies looking to expand, develop and build businesses that provide jobs.
Griffin Capital SBA offers loans of $ 400,000 or more in all 50 states and the District of Columbia. SBA loans are processed only by companies that have been certified to do so. These Certified Development Corporations, or CDC, creating a security subordinated debt which becomes a second commercial mortgage. This bond is used to reduce the overall exposure of the first lender to trust, if the borrower defaults on its loans the government will lose their money before the first lender confidence.
However, consumers should know that SBA loans come with a guarantee fees and other loan rates. The type of bonds in general, is a fixed rate for the entire term of the loan. Griffin Capital then a first-confidence in front of the SBA commercial mortgage loan obligations in order to maximize the loan to value, sometimes a borrower can receive a loan of up to 90% of the total project cost. The terms of the 504 SBA loans are generally for 20 years, but not part of the SBA commercial mortgage loan may be longer, so that the weighted average term of the commercial mortgage loan is 25 years.
Funds for an SBA loan of 504 may only be used for the purchase of land and improvements, grading, utilities, gardens, parks, construction of new facilities, upgrading of the properties, the long-term purchase of machinery and equipment and other fixed assets projects. There are also restrictions on the loans. For example, SBA commercial mortgage loans can not be used to pay other debts, refinancing, the purchase of inventory, capital investments or consolidations.
Griffin Capital interest rates on loans from the SBA are very comparable to the commercial mortgage rates. The SBA charges a guarantee fee of 3% of the total loan, which can be financed in the loan. Usually, the assets that are financed are used as collateral, along with a personal guarantee of the main owners. 504 SBA loans are ideal for companies looking to expand or buy real estate.
