For businesses seeking property or equipment loans, finding the lowest interest rate can seem like the best move. However, bear in mind that the interest rate is only one aspect of your loan contract, and it doesn't mean you will pay the least amount of money over the life of the loan. Therefore, the loan with the lowest interest rate might not actually be the best loan for your business. In fact, Community Business Finance's 504 Loan Program has many advantages over a conventional loan.
August 4th was Startup Day Across America, when we celebrate entrepreneurs and connect them with elected officials to discuss the challenges that new companies face. Entrepreneurs are crucial to both local and national economic growth. For over 30 years, startups have created an average of 1.5 million jobs per year, and Texas ranks fifth highest on the Kauffman Index of Growth Entrepreneurship.
Community Business Finance's 504 Loan Program has many advantages over a conventional loan. For businesses seeking property or equipment loans, finding the lowest interest rate seems like the best move. However, bear in mind that the interest rate is only one aspect of your loan contract. Therefore, the loan with the lowest interest rate might not actually be the best loan for your business. Let's examine the differences between conventional loans and 504 loans.
While Community Business Finance celebrates our 10th anniversary this year, we want to share the top ten reasons to use the 504 Loan Program. 504 loans provide businesses with financing for major fixed assets, such as real estate and equipment, to promote economic growth.
The North Texas Association of Government Guaranteed Lenders (NTAGGL) is hosting the 21st Annual Mid-America Lender's Conference August 31-September 2, 2015 at the Sheraton Dallas Hotel, and Community Business Finance is looking forward to meeting lenders from all over the nation. Join us in booth P1 to discuss the benefits of offering SBA Loan Programs.
Last week we discussed the importance of the SBA Guaranteed Loan Programs in light of the recent 7(a) funding crisis. Without access to 7(a) loans, many small businesses would be simply unable to find suitable financing. There are some valuable lessons to be learned from this latest emergency.
Good news for SBA lenders and borrowers– the SBA 7(a) Loan Program is back in business. On July 23rd the program reached its loan guaranty limit of $18.75 billion. Lending was suspended until the new fiscal year begins on October 1st. Applications were put on a wait list for approval until funds were available again. Fortunately, Congress voted to raise the cap on 7(a) loans by $4.75 billion to $23.5 billion, which President Obama signed into law on July 28th.
The recent floods in Houston and throughout Texas devastated many communities and the businesses that support them. However, in the words of Will Rogers, "Texas is a great state. No matter what happens to it...it just keeps rolling along!"
As Texans begin to repair and rebuild from the damaging forces of Mother Nature, Community Business Finance is encouraging business owners to explore the benefits of the 504 Loan Program. 504 loans allow you to construct a new building or renovate an existing structure. You can also purchase machinery and equipment.
Bill Ebersole explains the differences between the SBA 504 and 7(a) lending programs in regard to commercial real estate financing. The 504 Loan Program was designed specifically for real estate and equipment purchases. It offers a fixed interest rate for 20 years. While the 7(a) Loan Program usually has a variable interest rate, Bill offers insight as to why 7(a) loans are sometimes used for real estate financing. Community Business Finance specializes in 504 fixed-rate loans in Texas and Louisiana, but we are experts in all SBA lending programs.
At Community Business Finance, we offer both popular SBA loan guarantee programs: 504 and 7(a). While there is some overlap, these programs were designed for different business needs, with different goals in mind. The 504 loan is intended for economic development; therefore, its use is restricted to real-estate and fixed asset purchases, as these could promote job creation. The 7(a) loan can be used for working capital for almost any business expense. The 7(a) loan can also be used for real-estate loans, but the 504 loan is clearly better suited for this need.