Personal Guarantees and the 504 Loan Program

I am often asked why the SBA requires personal guarantors for 504 loans. There are several reasons for this. First understand that personal guarantees are required on all SBA loans. A personal guarantee is not a sign that your business is unhealthy or risky. Even businesses with a solid performance history and an excellent credit rating will be required to sign personal guarantees.

Tax Returns and the 504 Loan Program

Justice Oliver Wendell Holmes, Jr. reportedly said, "I like to pay taxes. With them I buy civilization." Civilization is not the only benefit of paying taxes. The most successful businesses in America are the ones that accurately report their income and faithfully pay their taxes. In fact, accuracy is crucial to the success of a business. It is also crucial when securing a business loan, such as Community Business Finance's 504 loan.

It is Time for Property Ownership

Rising Interest Rates and the 504 Loan Program

After years of historic lows, interest rates are finally on the rise. Chairman of the Federal Reserve Board Ben Bernanke has said that the Federal Reserve would begin to taper their bond-buying stimulus program this year. The central bank launched the program in 2008 to help lower long-term interest rates and stimulate economic activity. 

The 5 Cs of Credit: Collateral

We have been discussing how lenders and the SBA use the Five Cs of Credit when assessing a 504 loan application: Character, Capacity, Capital, Collateral and Conditions. The quality of Collateral refers to the asset or assets a borrower pledges to secure a loan.

The 5 Cs of Credit: Capital

We have been discussing how lenders and the SBA use the Five Cs of Credit when assessing a 504 loan application: Character, Capacity, Capital, Conditions and Collateral. The quality of Capital refers to the amount of money personally invested by the owners and is an indication of how much owners have at risk should the business fail.

The 5 Cs of Credit: Character

We have discussed what types of information lenders and the SBA require when applying for a 504 loan, but how do they evaluate the information? Although every lending situation is different, most lenders use the Five Cs of Credit when assessing your loan application. These are Character, Capacity, Capital, Conditions and Collateral. We will examine each of these areas and why they matter in the lending environment.

SBDCs Can Improve Your SBA 504 Loan Outcome

Previously on our blog, we have detailed the steps in preparing for an SBA 504 loan. We identified the crucial information needed for a successful application and outlined the elements of a solid business plan. However, you might not know that there is an extensive network of Small Business Development Centers eager to assist you in gathering and understanding the information necessary for your 504 loan. Even more exciting, consulting services are free of charge and training services cost very little.

Pages