7.25% fixed for 20 years for real estate projects, including acquisition, new construction and major renovation.

7.45% fixed for 10 years for equipment and machinery.

(Rate as of July 12, 2006)

If you're looking at a new franchise operation in which the borrower will need to buy or build a new building, then 504 financing might be the best option for you to consider.

We can easily finance the real-estate components of franchise deals. In many cases, we can also include the equipment needed for the location.

Because we can offer the borrower a low downpayment on these components of the transaction, the borrower will ideally have plenty of funds for ineligible 504 cost items - such as the franchise fee, initial working capital, etc.

We can quickly work with you through the issues that are involved in a particular franchise. However, there's also an easily accessible tool you can use for both SBA 504 and 7(a) transactions. The SBA maintains a website of approved franchise operations: http://rs6.net/tn.jsp?t=xrdlwwbab.0.0.6a6fftbab.0&ts=S0194&p=http%3A%2F%2Fwww.franchiseregistry.com

Franchises that are listed on the Registry section of this website have already received an SBA approval, and only need a letter from the franchisor indicating whether or not there have been any changes in their basic franchise offering agreement since the time of the last approval.This process dramatically speeds up the approval process on loans to these franchisees, and eliminates a lot of paperwork examination of the franchise agreement.

Of course, we can also provide loans to franchises that are not on this list. We simply have to review the basic agreement in depth, and get the SBA to confirm that the franchise meets their standards.

If you have a franchise deal you'd like us to consider, call your local Self-Help 504 loan officer. We'll be happy to help you in any way we can.

Most of the 504 loans we originate involve working with a borrower who is buying an existing building, or building a new one from the ground up.

However, we can also assist borrowers who are simply seeking to undertake an expansion of their current building. Assume you face the following situation:

• Your borrower owns a building worth about $1 million. The borrower has debt of $800,000 on the property.
• Because of the steady growth of the business, the borrower has decided it's time to do a major addition to the building. The borrower has estimated that it will cost $1.25 million to buy an adjacent tract of land and double the square footage of the building.
• The borrower is doing very well, but really can't afford to part with $250,000 in cash to finance this addition - but your analysis of the situation indicates the borrower really needs to do so to remain within your LTV limits. Such downpayment would strap working capital from the business that its growth would be limited in the coming few years.

We could help with this situation by preparing a 504 package to finance this new expansion:

• For SBA purposes, we would define the "project" as the $1.25 million expansion. We would split up this financing in the standard format - typically 50-40-10, unless the borrower required a higher downpayment for SBA purposes.
• Thus, the borrower could undertake this project with a downpayment as low as $125,000.
• Your LTV would be much lower because Self-Help would pick up $500,000 (40% of the expansion) of the needed financing.
• Under certain circumstances, we might be able to count some of the borrower's existing equity in the property - defined as the difference between "as-is" appraised value and outstanding debt - as part or all of the needed downpayment. This structure would further reduce the funds needed for such a project, and allow the borrower to hold onto the working capital that can fuel growth.

We can also use this structure to finance an addition to a property that already has a 504 loan on it. We've successfully financed additions for a number of our borrowers, using second 504 loan packages to proivde the expansion capital.

If you have a borrower who can use the power of our low downpayment on a building expansion, please give us a call. We'll be happy to work with you to see how we can assist you and the borrower.

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 with expansion needs.

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

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

Northeastern NC Region: Gerry Blood, 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/Greensboro Office: Travis Idol, Self-Help, 122 N. Elm St., Suite 1015, Greensboro, NC 27401 * 800-269-7426

Triad/Winston-Salem Office: Anna Tefft, 500 West Fourth Street, Suite 200, Winston-Salem, NC 27101 * 336-478-2611

Triangle Region: Joe Osowski, Self-Help, 301 W. Main St., PO 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 jim.overton@self- help.org.

Email :: 504loans@self-help.org

Visit Us Online :: http://www.self-help.org/504loans