Are you interested in the 504 Loan Program but unsure about what is involved? Community Business Finance's four-step loan process makes getting a 504 loan easier to understand. Our loan experts will navigate the entire process, from application through final funding, to make it as painless as possible for the borrower.
In part 2, we explain closing and final funding. For even more information, visit our 504 School.
Step 3: Closing
As we discussed in Part 1, Community Business Finance partners with your bank to share the total financing for the loan. During initial funding, your bank funds a first lien loan as well as a bridge loan to provide interim financing while your SBA 504 loan is being prepared for funding.
Once you move into your building, Community Business Finance accelerates the 504 funding process to pay off your bank's bridge loan. We are in constant communication with your bank and other entities involved in preparing your final 504 loan documents.
Our closing processor may contact you to get additional information not already provided to the bank. If more than six months have passed since your 504 loan was approved, we will need updated financial information. As a reminder, a list of the financial information you will need to provide can be found on our website.
Step 4: Final Funding
The last step of the 504 loan process is final funding. After you have moved into your building, or taken ownership of your equipment, Community Business Finance submits your loan documents to the SBA for funding.
Your loan is then pooled with other 504 loans from across the country and funded via the sale of a federally insured bond to private investors. Your interest rate is "locked in" at this time based on current market conditions. You can review the current debenture rates on our home page.
Next, your bank bridge loan is paid off with the proceeds from the bond sale and replaced with your permanent SBA 504 loan. We explain bridge loans in Part 1 of this series, or you can learn more in Bridge Financing and the 504 Loan Program.
You will receive your loan payment schedule approximately one week before your first payment is due. Your payment must always be made on the first day of the month.
Contact our offices today to see why our 504 Loan Program is the right choice for your business financing, and why we are the right lending partner to build your business dreams.
In Texas call Bill Ebersole at 713-457-1650, ext. 201, or email him at firstname.lastname@example.org.
In Louisiana, call Jeanne Bergeron at 1-800-462-1017, or email her at email@example.com.