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.
The 504 Loan Program is a good financing choice for franchises. Since the SBA has streamlined the approval process for franchisees, it is easier than ever to get the financing needed, especially when entrepreneurs open multiple franchises. The down payment needed for a commercial bank loan is often too high, usually 20% of the project cost, for most borrowers to accommodate. The capital outlay for franchisees typically includes franchise fees, royalties, marketing fees, and sometimes required products.
Effective January 1, 2017, the SBA has changed the process for how SBA lenders finance franchise borrowers. The SBA says the purpose of the revisions is to "streamline the procedures" for determining whether a business qualifies as a small business when applying for an SBA loan. This change speeds up the loan process while minimizing the resources required by the SBA.
By the end of every January, mailboxes are filled with envelopes stamped "important tax documents enclosed." These notices mark the official start of tax season. This year, personal income taxes for 2016 are due on Tuesday, April 18th. While that date may seem far off, it is never too early to start preparing.
When you get any business loan, the lender wants assurance that you will pay the loan back. There are several ways for a lender to protect itself, but two of the most common are for the lender to require collateral and a personal guarantee. A personal guarantee is a legal contract between a lender and business owners or other individuals to guarantee loan repayment. These guarantors agree that a lender has the right to pursue loan repayment directly from their personal net worth if the loan should go in default.
Are you prepared to approach lenders for a business loan? One of the first things a potential lender will ask to see is your business plan. In fact, it will be impossible to secure most loans without one. Community Business Finance has touted the importance of a business plan before, but it is not just another hoop to jump through on the road to funding. It is a living document that shows investors, advisors and lenders the you are serious about making your business successful.