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Self-Help Ventures Fund
SBA 504 Loan Program e-news Brief
October 2007
 
On Oct. 15, we were named SBA North Carolina CDC of the Year, so "Thank You," to our lending partners, who made this honor possible.
 
The start of the new federal fiscal year this month brought welcome relief on debenture fees for all new 504 borrowers. This fee reduction will save new borrowers an estimated average of 7-10 basis points over the lifetime of their loans. Since we only do a maximum of 40% of the project financing, this drops our debenture fees on average to less than 1% of the total financing.

If you want to see a sample copy of how this fee changes the typical debenture, e-mail us at
504loans@self-help.org and we'll send you a spreadsheet showing the way this affects the debenture structure.
 
We appreciate your ongoing support and look forward to working with you to provide 504 financing in all seven Self-Help locations statewide for growing small business communities.

For an in-depth look at the SBA 504 program, please visit the 504 section of Self-Help's website at www.self-help.org/504loans.

 
Jim Overton
Director of SBA 504 Lending
UNDERWRITING TIP: 504 NOT JUST FOR CONSTRUCTION

Do you have a borrower who's buying an existing building that needs little or no renovation? If they're ready to move in quickly, that borrower is the perfect candidate for an SBA 504 loan.

Many people still believe that 504 loans are only for new construction or for a major overhaul of an existing structure. That's not true at all. Our borrowers can buy existing buildings that involve no construction at all. Even if there's modest upfit involved, we can move them through the approval and closing process swiftly.

There are numerous advantages to the borrower and you for using the 504 program in these situations:
  1. More certainty about what the final budget will be: We'll be more confident about what end-of-project adjustments to make in the 504 loan package. Even when there's some construction, the budget is usually pretty predictable - and our closing process is smoother and swifter.
  2. Less interim exposure for you: In most cases, we can execute the paperwork on our loan at the same time you close your interim financing. As a result, we can fund our 504 loan much more quickly than when we do our closing at the end of a project.
  3. Less interest rate uncertainty about the 504 piece of the financing package: This is possible because we can move to funding more quickly.
  4. More flexibility on what space your borrower can purchase: On existing buildings, the borrower can lease out up to 49% of the acquired space, as compared to the "60-20-20" standards on new construction.
The attractive rate climate we have now presents the perfect time to offer this opportunity to your borrowers. We can get you a quick SBA approval, move our loan into closing - and ideally fund it within a few months.

That's plenty of time to let your borrower lock in at the current extremely low rates. It's a real advantage to be able to suggest to your borrowers that they can get fixed rates as low as 6.54%.

Call your local Self-Help loan officer to help your borrowers take advantage of these rates now.

BORROWER SUCCESS STORY: THE FILA ACADEMY

In 1974 Mary Ann Fila started a salon professionals school in Baltimore where her son, Larry, got his start shining shoes. Now, Larry owns The Fila Academy, which is thriving and set to open up its first school outside Maryland. We're financing the 16,000-sqare-foot school in High Point with an SBA 504 loan in partnership with Wachovia Small Business Capital. The school will create 25-30 staffing positions and has capacity for 250 students.

"Our philosophy is that when you hit a roadblock in the way of a worthwhile objective you can either look for an escape or a solution. We found our solution in the SBA 504 loan program."

 
In This Issue:
504 Rates are Falling Down
Borrower Success Story
Current 504 Loan Rates
Lenders Spotlight
Contact Us
CURRENT 504 LOAN RATES

6.54%
fixed for 20 years for real estate projects, including acquisition, new construction and major renovation

6.50%
fixed for 10 years for heavy-duty equipment and machinery

(as of Oct 12th, 2007)
LENDERS SPOTLIGHT: SELF-HELP SEPTEMBER 2007 SBA 504 APPROVALS

We held back most of our loans for this month until October, so that our borrowers could enjoy the reduced fees on new SBA debentures. However, we did approve one very strong loan - to a growing manufacturer in a rural, economically distressed area.

LENDER     LOCATION                 INDUSTRY                             PROJECT COST
  BB&T        Stoneville      Mecahnical Equipment Manufacturing           $808,200    


CONTACT US

Call the Self-Help loan officer nearest you to discuss a project or learn more about how you can use an SBA 504 loan to help your small business customers. 

Charlotte NC Region: Dale Harrold and Ralph Ansell, Self-Help, Great Aunt Stella Center, 926 Elizabeth Ave., Suite 302, Charlotte, NC 28204 * 800-394-7428

Sandhills NC Region: Allen Cofiori, Self-Help, 100 Hay St., Suite 300, Fayetteville, NC 28301 * 800-774-7966

Northeastern NC Region: Adelcio Lugo, Self-Help, 301 South Evans St., Suite 306, Greenville, NC 27858 * 800-893-9669

Southeastern NC Region: Louis Rogers, Self-Help, 272 N. Front St., Suite 300, Wilmington, NC 28401 * 877-559-4284

Triad NC Region: Anna Tefft, Self-Help, 122 N. Elm St., Suite 1015, Greensboro, NC 27401 and 500 West Fourth Street, Suite 200, Winston-Salem, NC 27101  * 800-269-7426

Central NC Region: Joe Osowski, Self-Help, 301 W. Main St., P.O. Box 3619, Durham, NC 27702 * 800-476-7428

Western NC Region: Tom Byers, Self-Help, 34 Wall St., Suite 704, Asheville, NC 28801 * 800-229-7428

Contact our SBA 504 Program Director, Jim Overton, at 919-956-4473.

Or contact our SBA 504 Marketing Officer, Jamie Miyares, at 919-956-4670. 

This email was sent to jung.ryu@self-help.org, by 504loans@self-help.org
Self-Help Ventures Fund | 301 West Main St. | P.O. Box 3619 | Durham | NC | 27701