Saturday, November 25th, is Small Business Saturday. Positioned between Black Friday and Cyber Monday, Small Business Saturday allows us to use our holiday shopping dollars to recognize the importance of small businesses and the contributions they make to our communities and our country's economy.
This week, October 30 – November 3, is National Veterans Small Business Week. NVSBW was created to honor Veteran entrepreneurs who continue to serve our country by starting businesses, creating jobs and fueling economic growth.
With more than 27 million small businesses in the United States, small businesses are critical to our nation's economy, employing over half of the country's private-sector workforce.
Community Business Finance recently helped a client in Louisiana purchase property with a 504 Loan. The commercial janitorial service was unfamiliar with the 504 Loan Program, however the proceeds enabled the owners to buy the building that they had been leasing for many years. With a 504 Loan, they were able to put only 10% down and are very happy with a 20-year fixed rate mortgage on the SBA's portion of the loan.
Community Business Finance's mission is to encourage economic development throughout Texas and Louisiana. In carrying out this mission, we are dedicated to borrower education and seek to inform businesses about the underutilized 504 Loan Program. As a dynamic resource for our communities, we have created a library of information to help borrowers understand the 504 Loan Program and prepare them for a successful loan outcome.
Community Business Finance provides businesses with fixed-rate financing for major fixed assets such as office buildings, retail buildings, warehouse facilities, heavy equipment, and commercial vessels. Projects are typically financed with two loans: a first lien loan through a commercial lending partner for 50% of the project cost and a second lien loan for 30% - 40% of the project cost, financed by Community Business Finance through the sale of a debenture bond. The borrower provides up to a 20% down payment, but typically only 10%.
In 1999, Congress designated May as National Military Appreciation Month to allow the nation the opportunity to publicly demonstrate its appreciation for the sacrifices and successes made by present and past service members. In addition to Memorial Day, May honors our military with Armed Forces Day, Loyalty Day and Military Spouse Appreciation Day.
The old adage "good things come in small packages" certainly applies to our recently closed loan for Perrier Esquerre Contractors LLC. The owners were renting a commercial space and wanted to purchase land and a larger building from which to operate their company. Community Business Finance was pleased to help this company obtain financing through the 504 Loan Program with a total project cost of less than $350,000. In fact, the SBA portion of the loan was less than $150,000, much lower than most home mortgages these days.
It's time to celebrate America's small businesses and the big contributions they make in our local communities and to our national economy. National Small Business Week, April 30 – May 6, 2017, is also our chance to salute the small business owners who create two out of every three jobs for Americans. Despite being the key to our nation's recovery after the recession, many small businesses cannot get the funding they need to expand their operations.
The SBA 504 Loan Program was created to provide long-term financing to small businesses for the purchase or improvement of land, buildings and major equipment. The 504 Debt Refinancing Program allows those who already have such debt, through a non-SBA loan, to refinance it into long-term, fixed-rate loans. This program is invaluable to entrepreneurs and small business owners who need to reduce their high-cost debt, including adjustable-rate debt.
Many lenders believe they have to be a certified SBA lender to offer any SBA loans. The truth is that the SBA does not require a lender to be certified to participate in the 504 Loan Program because these loans require partnership with a Certified Development Corporation. CDCs, such as Community Business Finance, are nonprofit organizations certified by the SBA to provide 504 loans to small businesses statewide.