504 LOANS FINANCE
KEY POINTS FOR LENDERS
The Lender’s Role in the 504
- Provide the interim funding until the deed is recorded and set interim rate
- Bank’s term must be at least 10-years with Growth Corp’s 20- and 25-year bonds. And the bank’s term must be at least 7-years with Growth Corp’s 10-year bonds.
- Bank gets first lien on all project assets
- Advance is up to 95% of the appraised value on real estate (5% variance)
- Size Standards: a tangible net worth of less than $15 million and profits (after taxes) of less than $5 million (including affiliates)
- Economic life of the asset to be financed needs to meet or exceed the loan term
SBA 504 LOANS
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